tv U.S. House of Representatives CSPAN September 18, 2009 1:00pm-6:30pm EDT
intelligence about iran's missile system, what they are building. how can you be confident, given the track record of our intelligence agencies, that that is accurate information? >> the president, the national security team, have confidence in that the information and the assessments that they were given about -- without getting specific -- the current development where iran is focused his and where they are having challenges. .
>> i think what is important is that a serious group of people have confidence in it. something i stated yesterday, we have the very same players in secretary gates and general kurt rate, the vice chair of the joint chiefs of staff, who, based on intelligence and based on technological assessment, determined 2006 and made a recommendation to then president bush based on numerous intelligence assessments and upgraded and more tested technology, and they made a recommendation to president obama that he accepted. it is the same team, the same players that are making those judgments. without giving detailed in those
assessments, we have confidence. >> does the president have a response to the fact that we mentioned the block this bill yesterday in college park, and it was booed? >> not that i know of. >> [inaudible] >> we went over this of this time yesterday. nothing has changed. >> you have not answered me very clearly. [laughter] >> then do not take my word for it, helen. can somebody print a copy of the speech, and we can give it highlighted the version of it to her. >> he is never pushed for it. >> i gave in and clear answer yesterday. >> the first lady was tying the push for reform to equality for women and trying to get one and sort of involved in the reform. is this a part of the strategy
now, to get women involved in this push? >> i think with the first lady highlighted was an aspect of health care reform that we believe is a very important, the burden that it puts on those that are primary care givers for families and what they have to go through either with the skyrocketing cost of health care or in the event that they do not have health care. look, i think this is an issue that touches men and women at every income level regardless of what you do for a living. i think this is simply addressing one aspect of that, knowing that everybody is struggling with the high cost of medical care. they're watching skyrocketing premiums, and other employer may be dropping their coverage.
they may not have coverage. i think all of that is important enough to reform. >> is it her personal touch to really tell women that we believe in equality for women? >> the work-family balance is something the first lady has spent a lot of time living, thinking about, and talking about as first lady. >> another question on the media blitz from the president this weekend. on monday, when you look back at what the president was able to do in terms of showing up on these shows, do you feel it is been a game changer? will it help advance the reform game? >> i have done this before. i am hesitant to look at every moment and every debate as some massive influx shouldn't moment. >> but is it important? >> i am addressing one permissive your multi-promised question. obviously, as some say, in what
the president does for media -- obviously, if i did not think it was important, i would be wasting an hour and a half on the president's schedule, and obviously, we do not think that is the case. i do not think we are going to look back a series of interviews is a game changing moment. i think it is important that the president continue to speak to a host of different audiences, to reach as many people as possible to talk about the benefits of health care. we have talked about this before. people are getting news from so many different places and so many different outlets that we will use the president to communicate to the fragmentation. >> since this is the very day he is tipping the modified polled ginsburg, are people going to
start turning him out if he is out there this much? >> there was a good line this morning while sifting through the questions of overexposure in between interview request invitations. so, no. >> just because we want him does not mean people are necessarily listening. >> that we contemplate that for a moment. [laughter] i think they can free of at least 15 minutes on the president's afternoon schedule. no, this is true in all the research that we see and in the research that you do. the american people understand of the big challenges that our country has, and they want to hear from the president of the united states about the choices we have and the decisions we are making, and the importance of each and every thing he is
spending his time are in. there is nothing that denotes the people are spending less time thinking about health care or watching the president. did eyes don't you? ok, go ahead. >> everything at the g-8 seemed to indicate that these meetings next week, we would know the direction of our relationship to the negotiations, whatever you want to talk about it when it comes to iran. by the end of next week, will it be clear -- will there be something tangible that everybody can think this iran thing is headed this way or head it this way? will it be a fork in the road moment? >> no, i think the for delay the road moment will come with the iranians. there is a decision moment they will have to make about the road in which they take on this.
>> right. >> the lead me finish my answer. obviously, this is a topic that comes up in our discussions. it is on the present. i think you heard her mention a ministerial level meeting of the p-5 plus one. there and is now leaders the president will talk to including throughout the un general assembly and the g-8. october 1 is an important meeting to determine how serious the iranians are at addressing the multitude of international questions about their illicit nuclear weapons program. when i mentioned before in the road, i think they have decisions they will have to make -- when i mentioned the fork in the road, i think in the
decisions they will have to make that their failure to even talk about will further galvanized international community. >> should we anticipate whether it is in the communique on friday -- >> i do not think it is one moment. it is a subject that will happen throughout the next several weeks and up to and including october 1. >> yesterday, speaker pelosi compared to the violence that she has seen it now, she linked it to what she said she saw in the 1970's in san francisco, the implication being that it eventually led to the death of harvey milk. is this helpful to have her speak about this in those terms? how do you view -- this is the second with president carter earlier this week and now speaker pelosi. they are not columnists.
>> look, i do not have anything to add to this other than what i said in the earlthe last couple days. the president, his belief is that political disagreement, even passionate political disagreement has happened throughout our history as a country and is not likely to change anytime soon, and it is not think it should. i think what he would tell you how it is a bad as we have that political disagreement, as we talk about different avenues of policies that we can and should take, we should be able to do that in a way that is civil in town and civil in matter. >> the obligation of it is she believed that leaders in the republican party -- they see
stuff under should denounce it. >> think there is an obligation for all of us involved, right? not just the leaders. spokespeople and any participants in this debate to ensure that that passionate political debate is about the important issues at hand and that it is done in a civil way. i do not it is helpful for either side of the political debate to unnecessarily or offensively characterize an action or person or anything like that. that, i would say to friends on the right and friends on the left. >> is there policing going on? >> i think that is something that each member and each person
involved will have to ask. >> why and then, in the uptick in passion in the last eight months, what is the more of a negative against this president with of spoken words and people than other presidents in modern times and the worst times? >> i think if i was standing -- if somebody was standing up here a year ago or two years ago in a previous administration, they might say that passions ran quite high about the president then. i have certainly seen in reporting the bill and historians and noting that passions have always been high,
particularly around important issue debates. i do not think that -- and i will reiterate what i said the the day, which was we are in a culture and society that tends not to cover the middle of the road of this debate. it tends not to show on the evening news or on the radio or in the newspaper visit quietly register their opinions. >> passions ran high with the ship privatizing social security. you did not hear people screaming at then-president bush. also during the impeachment trial with bill clinton, passions ran high. both of these former presidents spoke in the well of the house, and no one stood up and raised concerns or screamed their thoughts. >> i do not know the position of the previous administration. i think passions ran high. i recall passions running high
around our involvement in iraq. what, i did not answer that truthfully either? [laughter] >> bush had a shoe thrown at him in another country. that is another country, not here. that was from a foreign journalist. i am talking here with american citizens. come on. >> i think i have exhausted said topic. >> let me ask, does president obama feel he is catching more heated than any of his predecessors? >> no. >> is he worried that opposition necessarily leads to violence? >> no. again, with the president would say is that we all have to check our emotions despite the depth of our beliefs, that we can have these kind of debate this, important political
debates, without doing so in a way that makes anybody feel uncomfortable or that could lead to what you're suggesting. i also happen to believe that it takes away from what you are debating. i think that is also one of the things the president would say. >> would you ever say race is a factor? would you ever? i am talking about down the road, not the other day. >> now i am not only a spokesman for the bush administration, i am looking into my crystal ball. >> you have a leader of the free world. he is not some joe blow of the street. >> he is the 39th president of the united states. >> you are having white major leaders saying this. you cannot discount it. >> i do not discount the views
of former president carter. i do not discount the views of speaker pelosi. i do not discount the views of anybody. we have had this discussion alone in my office. now we have had it in front of whoever might be watching. the answer is the same. >> in the interviews and in the health care rallies he did yesterday and last saturday, as president obama believe that there still wines to be changed on the health care issue? >> sure. >> in congress as well? >> i hope in congress and certainly amongst the american people. i think those that watched the speech came away with a better understanding of what the president wanted to do. i think those that want to talk about his health care reform plan have a better sense of how it impacts them and how it changes the cost they pay and how it makes health care more
affordable. in that way, i think it is beneficial. >> the fine print -- prime minister britain called the president's decision correct. is putin mistreating the president's decision? was it a concession? >> you can watch the last few minutes of the briefing on line at c-span.org. we're not going to take you live to the speed by mary schapiro, the chairman of the sec. it is part of this all the conference that is hosted by georgetown university, the school of business. live coverage on c-span. >> it gives me great pleasure to introduce our keynote speaker, chairman mary schapiro, who is the chairman of the united states securities and exchange commission. she is the 29th chairman of the u.s. sec. she's the first woman to serve as the agency's permanent chairman.
being the chairman of the sec has to be one of the most of the cold jobs in this current environment. the sec, and the whole regulatory structure is currently under the microscope. the financial crisis has exposed the many weaknesses in our regulatory framework. chairman shapiro is suited to end -- suited to head the sec during this most challenging time in the commission's 75-year history. during the few months but she has been in office, she is already moved at a great sense of urgency. under her leadership, the sec is once again restoring its credibility and is starting to be seen as the into the responsible for and capable of restoring investor confidence. chairman shapiro is willing to take tough stances in the best interests of investors. prior to becoming an sec chairman, she was ceo of findra, and she successfully led a
consolidation with the new york stock exchange member regulation. chairman jazeera previously served as the commissioner of the sec from 1988 to 1994. she was appointed by president ronald reagan, reappointed by president george bush in 1989, and named acting chairman by president bill clinton in 1993, and now has been appointed by president obama. she left the sec initially when president bill clinton appointed her chairman of the cftc. she served there until 1996. in the partisan world of washington politics, it is quite unusual to see someone being appointed by four different presidents and being trusted by both political parties. chairman shapiro has a sophisticated understanding of interrelationships of global markets and is an act of a member of higher skilled, the
international organization of securities commissions. to imagine there is a graduate of franklin and marshall congress and went to george washington university. during this incredibly busy time, we are most grateful to you for taking the time to come and speak at this conference and to help us celebrate this very important event in the life of the person we're honoring. we're delighted to see you at the hilltop. we are extremely interested in what you have to sit. ladies and gentlemen, please welcome chairman shapiro. [applause] >> thank you. thank you all very much. and thank you, reena aggarwal, for that kind introduction and for sharing this very informative and i am sure successful conference. it is also a pleasure to be back
in georgetown, in the red building this time. i am honored to know so many faculty members and administrators here who i have worked with over the many years that i have been in washington, and they always give their time and talent to the regulators when we're seeking help. i want to thank the georgetown university mcdonough school of business for posting this event and congratulating all of you on your new home. i am sure it will to further strengthen the already great tradition of this institution holds here at the capitol and the united states and truly a around the world. i would like to congratulate especially the dean and entire faculty who held the day to educate our future business leaders. i thought i would start today by highlighting a sentence of the business school actually uses to describe itself. it reads, "this business school is committed to developing leaders capable of making complex business decision in a global environment."
but of course, was stood up for me is i know it does not say these leaders will be capable of making good business decisions. [laughter] just complex ones. of course, i realize there is no way to guarantee good decisions, and that is because a business decision is only as good as the information upon which it is based. if the business leader does not have or cannot get sufficient information, then even the training and education you get a first class institution in georgetown university will not guarantee that good business decisions will be made. so think about an oil company ceo who decides to drill off the coast of asia. it is likely to be a good decision, only if he has experts opining that there's probably oil there. it is even better if he can see and appreciate how the experts arrived at their field and how much it will cost to find out. without that information, the decision to drill may be a good
one for the company, but it does not necessarily mean it was a well-may decision. i think about the ceo of a real- estate company wants to acquire and remodel an aging building on the outskirts of town. once again, it is only a good decision if the ceo has a top- notch appraiser and an architect with a good set of blueprints. without that information, the decision is no better than buying a high-priced lottery ticket. in short, decisions in the business are based on information, and that means the most successful companies are often the ones with the best access to information. so one more example, take for instance a retail store that knows what their customers buy, how much they need, and when they needed. that store is going to have the right items in inventory at the right time, and their sales will be robust. but more information does not necessarily mean better information. too much and you do not know what is important. too much and you might not even get through it all.
instead, it is the right information that matters, and it is the right information that leads to the decisions. and in the world of securities, it is really no different. investors need to seek information so they can make good decisions. but if the information is obscured, vague, it is too plentiful or misleading or it is just false, investors made bad decisions and suffer profoundly for it. the recent economic crisis, i think, is a case of. . as you know, in the early part of the decade, many homes are sold to homeowners to elderly cannot afford to pay their mortgages. many of those mortgages were underwritten using lower underwriting standards where homebuyers did not even need proof of income. why? because the mortgage companies knew that there was a way to force the risk of themselves and go on to someone else. but the package is mortgages together and sell them to wall street, which in turn, would repackage them as investment vehicles are securities.
but most investors in those securities did not really know what was inside each of those mortgage-backed securities. and they really do not know how risky that financial product was. of course, it is possible but some information was out there. perhaps included among a dizzying array a potentially important data or perhaps made available in too short a time before an investment decision had to be made. but it does also just as likely that some investors simply decided to rely on experts who are paid to assess risks and grade a product. of course, as we know, many of those ratings were inflated, to say the very least, and investor decisions that were based on the wrong information turn out to be anything but bright. at the sec, we're very focused every day on making sure companies and those to issue securities are disclosing information that will help inform investors. that is really what we're all about. we always have the authority to
change conduct. we cannot tell a rating agency to a greater downgrade their ratings. we cannot tell a retail chain to cap pay of its executives. and we certainly cannot tell an oil company where to drill. but what we can do, among many of the things, is mandate full and honest disclosure. and that disclosure, the transparency, we believe, leads to better decisions. now the sec's role as a disclosure agencies well understood in the traditional sense. we are all well-versed in the requirements for annual and quarterly filings by public companies where they report the business and financial results, discussed the risks and their prospects. this information is the lifeblood of the capital markets as it is this information that allows investors to make informed decisions about allocation in the capital. but there many other ways that the sec can and does facilitate the decision making of investors through the provision of information. so as we have set out to change
the sec's approach to protecting investors and ensuring market integrity, disclosure is playing a central role. in a boot the seven months of been in the commission, we have been a great deal to reform the agency does business. we're streamlining, refocusing our enforcement processes, hiring new skills sets, and we're revamping to handle the hundreds of thousands of tips we get each year. we're bolstering our training programs and so much more. but we are also focusing on the rules we adopt, rules that guide businesses and the wall street, and many of the proposed changes we're making to those rules involves one basic goal, getting more of the right information into the hands of investors that the right time. from who is on corporate boards to what is behind a company's salary philosophy, from who is paying for credit rating to data about the successes and failures of those doing the reading, from how risks are being awarded in a company to the real price the
market is willing to pay. in all these areas and many more, we want investors to be better informed so their decisions are as well. just yesterday, for instance, my fellow commissioners and i proposed a host of rules regarding credit rating agencies. once a proposed rule seems pretty obvious. basically, is says let us know how good credit rating agencies really are. right now, they do not provide enough data about their rating actions to let investors determine their track record. instead what happens is the ratings agency reached a financial product, the company touts it when selling its securities, and investors rely on it without having any understanding of how this rating agency's ratings the performed in the past. investors do not know if the rating firm is really good at reading that type of product. so when an investor sees that the firm has just issued a aaa rating, a year she has no idea if that aaa really should be tripled the.
that is why we require the ratings agencies register with the sec as a nationally recognized and disclose their history of ratings on a delayed basis. how often do they change their ratings, for instance, and when did the of greater downgrade them? that little bit of information could go a long way in helping an investor decide how much relative weight to give to these ratings. also yesterday, we proposed a rule that would highlight something called ratings shopping. for those students in the audience, i liken it to being able to choose your professor at the beginning of the school year based on who will promise to give you the best grade. [laughter] chances are, and because or georgetown students, you're very smart, you take the course with the professor promised to give you the "a." oddly, we have seen that happening in the credit rating arena. sponsors of financial products can shop around for a rating before buying any one the one. when the company that issues the financial products tell the
world -- but a aaa rating, no one knows the that was the third grade it received. that is what we hope to shed some light on this practice by requiring companies to disclose, not just the final reading from a particular rating agency, but all preliminary ratings the received from others as well. once again, that little bit of information can go a long way in helping an investor decide if the final reading is all it is purported to be. but our new rule proposals stores will be on credit ratings. earlier in the year, we proposed a series of rules related to proxy materials that investors receive when being asked to vote for board of directors. boards, as you know, can be made up of friends of the ceo or some very cool people like rock stars and athletes, and there may be nothing wrong with that, but the job of being a corporate director is a serious one as we must all rely on the vigilance, expertise, and the integrity of boards to oversee america's corporations. the reality is that today, i
think companies offer insufficient information about a board candidates actual qualifications for the job. so we're asking for better disclosure about each candidate particular experience, qualifications, attributes, or skills the qualified person to be a board member or to sit on a particular board committee like a risk committee. once again, that additional information could go a long wait for the shareholder who owns a piece of the company and who must make decisions about who will oversee management for the board service. likewise, investors can get a valuable incentive they understand how a company rewards risk. we all know the competition drives behavior. last year, the counter party risk management policy group in defiance combination schemes is one of the five primary driving forces of the economic turmoil. earlier this year, the financial stability for a composed of governments and around the world
issued a report agreeing with this assessment and suggested three principles for some compensation practices. these principles call for effective governance of compensation, effective alignment of compensation with prudent risk-taking, and effective supervisory oversight and engagement by stakeholders. the commission's proposed package of new proxy disclosure rules that are keeping with these principles, in particular, powering stakeholders with the information necessary for effective engagement. we might not be able to, nor would we want to ban risk- taking, but we can expose it, and more information will help shareholders make good decisions. just yesterday, we took steps that would ban the trading practice called flash orders. and at its core, this, too, fits into the disclosure regime because it helps all investors to have equal access to
information. it is a little esoteric, but it goes right to the integrity of our marketplace. currently, i can place an order to sell some shares of my favorite company. and if the exchange for my order is rounded does not have a buyer, it roused my order to another exchange were buyers are waiting. but if my exchanged is not really want to lose that transaction, it can instead set to flash my order to just a select group of market for dissidents within its terms. and for a fraction of a second, those favored folks will have a quick peak and a headstart to decide if they want to execute my trade. this puts the by year, u.s. public and indicating he is ready, willing, and able to match that order, at a disadvantage. that is because of a select group of participants can essentially cut in line to buy the shares, using that information made publicly available by this fire that ever having to publicly display a quote. for those favored to the decline
began the order, they will have a better stance on where the market is headed based on information others will not have. such a practice has flourished because of long standing exception to our rules that we have now proposed to eliminate. by doing so, we can prevent a two-tiered market that is one market for those that can access information about the best available prices and one for those that cannot. in the area of municipal securities, we're also moving to improve the information is available to investors bid up as you well know, these are securities issued by governments to raise funds for a variety of projects like building roads and schools. even the municipal securities are subject to our antifraud standards, they are actually exempt from the detailed disclosure requirements of the federal securities laws. these markets are the foundation of state and local funding initiatives, and on the bataan, municipal securities are hugely popular with retail investors because of the commission has managed to create a disclosure
regime by placing it disclosure obligations, not on the local government issuers, but rather on the intermediaries who buy and sell these securities for investors. our recent sec proposals require disclosure concerning variable- rate demand obligations and, more generally, about ratings downgrades and other advance in the life of a muni security. we're very close to exhausting our statutory authority in this area. we will work with congress to promote a more robust disclosure and information regime for the future. yet again, it is a little bit of information for investors who want to make an informed decision. finally, in the same vein, we're trying to open a window into the world of short selling. just this summer, the sec said not to increase the public availability of short selling related information. as part of this initiative, the self-regulatory organizations are published in the aggregate volume of short sales occurred
on a given date for a given security, and it will be publishing on a delayed basis the raw data on individual short sale transactions as they occurred in real time. this, too, is a little bit of information that can help inform investors as they consider what stocks to buy and sell. in each of the cases involving corporate disclosure, you can see that we're not necessarily dictating how a firm should act. but i believe that when corporate disclosure is mandated, corporate actors may think twice. it is simply a byproduct of disclosure. we might add it to force the credit rating agency to make good ratings, but we should and of encouraging them to be more rigorous in how the rate and avoid conflicts of interest. we might not be able to enforce investors to minimize their reliance on ratings, but by disclosing ratings shopping, we know because the to think about the true value of the rating. we might not be allowed to big companies to only nominate warren buffetts to their boards, but we couldn't of encouraging
them to reconsider nominating someone with little qualification. and if that is what happens, it is not a bad thing. of course, it is not just investors who need information to make good decisions. it is the regulators who needed, to pick up any territory reform effort is in part about just that, gathering more information. many of the proposals will help regulators answer key questions such as how stable the hedge funds are that are not even regulated right now but are an enormous presence in our markets. what types risks exist as a result of credit defaults swaps and other over-the-counter derivatives? what are the system and risks that are emerging across entire financial spectrum? however congress decides to monitor systemic risk, be it 3 single ended the or a council of regulators, they will have to understand these risks, take steps to minimize them before crisis develops, and be ready to act fast. it will have to be able to make
good decisions, and they will need good information to make the right ones. in this interconnected global financial system, those decisions can have a worldwide impact. so that is really why we're all the disclosure and transparency, and that is why it is at the core of what we do. for those of you here who are student training to become the future business leaders of america and the rest of the world, i would say this, gathered the information, get the right information, understand that information, and then at no matter how complex the decision, you will be likely to make a good one. but in the process, please do not forget that investors deserve good information as well. thank you very much. i will be happy to take some questions. [applause] >> ok, we are a little behind
schedule, so i will not get all the questions in here. here are some late arrivals. the first one is kind of an interesting and capitalist question. do you feel that hedge funds should publicly disclose more information? could more disclosure not hurt investors by during -- deteriorating the funds strategic position? >> in the abstract, right now, we do not have the authority to require disclosure, either to the regulators or to the public about hedge funds. but as legislation advances, it will likely give the sec the authority to register hedge fund advisers. those are exactly the issues we are exploring. we are very aware of the tension between the need for transparency and the need for hedge funds to be able to have an investment strategy that is not front-run by other investors. we will likely end up with some fairly detailed reporting to regulators and some level of
public reporting of hedge funds, just as we have now for mutual- fund it would be hard to draw too great a distinction between the two. those are issues to be resolved >> next question, an accounting question. can you provide your thoughts on how one global standard, under ifrs will benefit disclosure across borders and if this will improve corporate governance? >> i am lawyer. i cannot tell you how on search -- how often i have answered accounting questions. it has been one of the revelations of taking this position. but i am happy about talking about ifrs. miti and the commission's visit would be ideal if we did have a single set of high quality accounting standards -- in my view and the commission's view is it would be ideal to have a single set of high quality accounting standards. it would help with accountability for large companies and giving investors the ability to make comparisons around the world for companies
in similar business sectors. i think it is a very laudable goal. the commission itself has published, this past spring, a road map for ifrs and ultimate adoption potentially by the u.s. of those standards. but the comment period closed this summer. we're working through those issues. i expect we will speak later this fall about what our expectations are with respect to ifrs. in the meantime, fasbe and the iasb are working together on a number of initiatives to try to achieve some convergence of particularly important accounting standards. and the goal is to achieve as much convergence between u.s.
gap and international standards as possible. i want to circle back to what i said at the beginning. high quality standards are what is so critical here. financial statements exist for investors to make rational decisions, good information, to make decisions about capital allocation. so the underlying premise for anything we do here has to be that the standards present truthful, neutral, a clear, and honest information about the financial situation of the company. that will be our guiding light. >> ok, next question. as it stands, the cftc and the sec will remain separate entities. however, will many bring the three bodies be effective in being able to keep open the innovation in financial products giving how chat -- how challenging former regulatory authority is divided between the sec and the cftc?
>> welcome me know, the cftc was created in 1974, i think, and probably the day after the bill was signed to create the agency, people started to argue about why it was not really part of the sec from the beginning. the debate has gone for 35 years. i have chaired the cftc to the i am now honor to chair the sec. so i have argued from every direction on this issue of whether the two agencies should be merged. my current view is that -- [laughter] it is that there actually would be tremendous efficiency for both industry and investors in the merger of the two agencies. clearly, not going to happen anytime soon. so we embarked on a program with the cftc to try to work together as effectively as we can for those categories of products that really are very similar on each of our jurisdictions. we had two days of harmonization
hearings to talk to us some of the big issues between us. we have a very robust work plan as we begin to look at where it is appropriate and where does not for us to harmonize the regulatory risk team and work together more effectively. if you look at the derivativesotc legislation, you will see that it calls for a significant amount of joint rule making between the two agencies. it is hard enough -- we have done it diet -- nine major role making said the sec this year. it is hard enough to get five commissioners to agree to move forward. now we will have to get 10 to move forward, coming from very different philosophical places. bed the chairman and i are highly committed to making this process work as effectively as we can. it is not about the agency's at the end of the day. it is about how to protect the american public and how to let commerce proceed in a
irrational and regulated, effective way. we are quite committed on this. >> we have a question with the short answer. is the proposed rule on disclosing rating agencies' performance or a directive? >> i believe it applies to ratings after january 2007. you can all read about it in the federal register. yasser pretty sure it is 2007. i should add that the performance history will be on a delayed basis. that is an important point. there basically two models for ratings agencies, a sure-paid where they -- a sure-paid and subscriber-paid. we do not want to disadvantaged that subscriber-paid model by having their intellectual property of their for all to
have on a free basis. nobody will end up paying for it all. we're trying to encourage a lot of competition. >> what role should fannie mae and freddie mac play going forward and in what form, public, private, or broken up into pieces? >> well, i have a short answer. [laughter] it is kind of be on my pay rate. even the administration and the white paper pushed this issue off for decision at a later date. it is a very, very difficult call to make. there are enormous competing interest on the policy side with respect to capital markets and competitive issues. i know there is an enormous amount of careful thought going on at the treasury and the fh geta and throughout the government. i think it is too early to signal where that might land. >> last question.
ah. now have to make a decision. professors are not good at that. [laughter] lead and let something non- controversial. this is not my question, before i read it. the sec has a notoriously hard to change a culture that has stymied previous commissioners. water you doing to change the culture? [laughter] something easy to end up with. >> it is a fair question. first of all, the sec also has an enormously proud 75-year history. there's not another agency in the federal government whose commitment over a long time spent to investors, it's a fair and free and open markets, to level-playing fields that matches the sec. i would not have come to the agency if i did not -- or come back to the agency if i did not
believe it was critically important to the success of our capital markets and our economy. over the last several years, i will say the agency has been caught up in some issues that i think are a little less front and center, particularly post- economic crisis. our focus has to be back on the investors. our focus has to be back on market integrity. and level playing fields. and i have found in my seven months so the agency that that message resonates enormously with the staff. changing cultures does not happen overnight, but the deep culture of the sec is actually a wonderful, strong, pro-investor culture. we have to take away some of the shackles that we have put on the staff over the years. we have to empower people to do things, to take the evidence to the very end of the process, to write the rules that are not going to be well-liked by
industry. as i said, we have done nine major role makings in this year. i have not a friend left in the world as a result. [laughter] but we have to be willing to do those things, and i have to be willing to send that message every single day. i think the commission has been trying to do that with a very aggressive agenda. we're trying to bring in some new leadership, new skills sets, new training programs, and frankly, some new ways of doing business. if i can give you one example -- for the first time in the agency's history, we created a new division of risk strategy for financial information. we brought in a professor from the university of texas who has written cutting its work on the intersection of financial information and the law. the whole idea is to bring a lot of smart people in who can help us throughout the agency think about risk, think about new ways to do things, and bring a fresh perspective. that is just one small example.
we're planting many seeds to try to focus people back on what our core mission of sibylla -- absolutely must be in the protecting investors. maybe he will invite me back in a year and i can give you an update. it has worked every single day. it does not change direction overnight. but i think we're doing all the things that we humanly can to make sure that this agency is really worthy of the confidence of american investors. thank you. >> mary, thank you so much. [applause] >> it is my pleasure. [applause] >> tuesday's scheduling note, returning later in this afternoon to georgetown university to hear remarks from the white house economic adviser, and larry summers. he is the keynote speaker at the
last session of this conference on global finance. see that live at 3:30 p.m. eastern here on c-span. saturday, elena kagan on her work as u.s. solicitor general. she spoke about how she prepares for arguing cases before the supreme court. and her thoughts on whether or not cameras should be allowed in the courtroom. that is tomorrow at 7:00 p.m. eastern on c-span. >> in 1971, as a "new york times" reporter, he intended top-secret pentagon papers. 18 years later, still writing about the vietnam war, he won the pulitzer prize for his book. this weekend, he will discuss his latest book, "a fiery peace in a cold war" on the nuclear arms race. that is sunday night on c-span. >> next month, take a rare visit and said the supreme court as we talk to the justices about the
role, traditions, and a history of the court. >> he said he would not come in here. the reason justice brandeis when not come is he said this building is so elaborate it would go to their heads. maybe he was right. but it has become, over time, a symbol of the court system, the third branch of government, and the need for stability, rule of law, which is what america stands for. >> supreme court week, starting october 4 on c-span. as a complement to this original production, c-span offers teachers free teaching resources on our judicial system to cspanclassroom.org. >> now the nato secretary- general on their relationship with russia. he called for the u.s., russia, and nato to link their missile defense systems against potential nuclear threats. this comes one day after president obama's announcement to scrap plans to build missile defense systems in the czech
my name is jessica mathews, president of the carnegie endowment for international peace, and it is my great pleasure to welcome you today to the first speech by the 12th secretary general of nato. we're honored to host this important event, and if i may, mr. secretary general, i would like to say that it is also apt the future as carnegie for our two organizations share a common mission, maintaining and promoting international peace. nato has done that for 60 years since the signing of the north atlantic treaty. carnegie has attempted to do it since its founding by andrew carnegie 99 years ago. throughout its history, the endowment has employed different methods and approaches for
pursuing this aim. it had, at various times, offices in paris and geneva. working on international conciliation in europe, on financing the reconstruction, and on the work of organizations including founding the academy of international law at the hague. in 2007, kennedy returned to europe, launching its european foreign policy forum, carnegie europe, here in brussels. since then, carnegie scholars have engaged with european policy makers and experts across capitals as well as here at the heart of multilateral europe. the new secretary-general has shown how he intends to proceed by choosing a controversial and deeply important topic, rather than the usual zone for his first speech. many of you will have read his interviews this week in which he
talked of his vision of a true strategic partnership with moscow. relations with moscow have been at the heart of the hard work as well for 15 years as we launched the carnegie moscow center in the early 1990's. since then, at its outstanding russian scholars, including its great director who is with us today, have become known around the world. the success of the moscow center, in its collaboration between moscow and washington, became the inspiration and the model for a fundamental redefinition of carnegie's role and mission to become the first truly multilateral and ultimately a global think tank. the idea of this new vision is that in today's world, an institution whose mission is to contribute to global peace and prosperity requires a permanent international presence and a multinational i look to the heart of its operations. this is, i'd think, not a
staggering incident here in europe, but it is an important first step and a new one, i think, in the united states. in his inaugural press conference, secretary general rasmussen lost no time in announcing the beginning of his own new vision, a new strategic concept for nato but to be agreed at the summit in lisbon. looking back at his career marked by achievement after its achievement, both in the danish pond -- politics and in late european leadership, it is hard to think of anyone better suited to that important ambition. secretary general, many of us applauded within days of taking office when you named relations with moscow -- with russia's one of your top three priorities. it is wrong in the disappointing that as we approach the 20th anniversary of the fall of the berlin wall, relations with russia can sometimes be nearly
as contentious as they were during the cold war. but the supply of energy, relations with georgia and ukraine can sometimes bring relations almost to the breaking point. we at carnegie are doing our best to help rebuild and rethink russian-western relations, and we will soon announce a major u.s.-europe- russian initiative to help define the shape of the new three-we security and economic compact. gideon nato's relations with russia and its neighbors right would unlocked cooperation on a whole range of crucial issues within the realm of nato's concerns and the will be on. mr. secretary general, we honor you for having chosen to challenge us all with the topic of this first important address, and we look forward to hearing your views. [applause]
>> ladies and gentlemen, all of you, thank you, first of all, for your warm words of welcome. this is my first major public speech as the new secretary general of nato. i have chosen to make this speech about the nato-russian relationship, and i am very happy that we could get the carnegie endowment, a think tank, with considerable expertise to host today's event. why did i choose to focus my first speech on russia?
on which nato and russia disagree and that will lead disappear overnight. i do believe that it is possible for nato and russia to make a new beginning and to enjoy of far more productive relationship in the future. i want to use this opportunity today to make three specific proposals to help us move in that direction. first, i believe that nato and russia should immediately look to reinforce our practical corp. in all the areas where we agree and face the same risks and threats to our security. and there are many of those areas. second, in order to build
confidence and trust, i would like to rejuvenate the nato- russia council so that we can use it as a forum for open and unbiased dialogue on all issues related to peace and stability in europe. and third, i would like to seek nato and russia agreed to carry out to a joint review on the new 21st century security challenges, to serve as a firm basis for our future corporation. as you can see, these proposals are linked. before i flesh of my ideas, let me stress that there is one
precondition for all this to work and that is for us all to display greater realism. let's be honest, when the cold war ended 20 years ago, nato and russia developed rather unrealistic expectations about each other. those blood expectations are still very much alive today -- those pulled expectations are still very much alive today and continued to burden us. put simply, russia expected nato to be dissolved when the war start pact collapsed. -- warsaw pact collapsed because it didn't, many in russia can only find one explanation, that the alliance still sees russia as a threat and everything we
do is seen through that prism. enlargement, missile defense, even our partnerships. for many in the west, the end of the cold war seemed to herald a new age when russia would see things our way, incorporate with this across the board, and support the membership in nato up former warsaw pact countries. that was, in retrospect, a little unrealistic. russia is a great european power with her own point of view and her own interests.
often, those don't coincide with ours and when that happens, there's a sense of disappointment and incomprehension among many in the west. it is no wonder that the nato- russian relationship has remained a difficult one. yes, we found a great language for our partnership aims. in the nato-russia founding act and in the rome declaration. we have not been able to translate them into reality. yes, we cooperated on a number of issues but this corporate -- cooperation was kept hostage to the overall political climate.
one major disagreement and it would falter. last year, following the war with georgia when russia unilaterally recognized acacia and other areas, we reached that point. our relationship with into a freeze because the foundations of this relationship were not strong enough. a time out may have been useful to rethink our relationship. the international security environment does not wait for nato and russia to sort out their act. quite simply, nato-russia
cooperation is not a matter of choice. it is a matter of necessity. if the relationship is to be successful then we must not continue to have false hopes. i firmly believe that now was the time for us all to be much more realistic. russia must realize that nato is here to stay, not because we think russia is an enemy, we do not, but because allies share common values and a culture of corp. -- of cooperation and we want to preserve it. there should be no doubt anywhere that this alliance will continue to make the security of
all its members our number one priority. and why not? i do not believe that the enlargement of nato and the european union has created any security problems for russia. on the contrary, a more stable and prosperous europe is indeed contributing to the security of russia. we also need to be realistic in recognizing that nato will continue its open door policy, not because of any intention to encircle or marginalized russia, but respect for territorial integrity and the right of each
sovereign state to freely decide its security policy and the lineman's, are fundamental if russia and russia will truly be free. finally, we also have to be more realistic in recognizing that russia has security interests which we need to understand and take into account. many things that nato allies may regard as entirely benign can sometimes look very different when seen from moscow. and vice versa. i make these points not in order to engage in some kind of blame game but to highlight the difficulties of the concrete
task before us. , making a new beginning in nato-russia relations. our ultimate goal must be a relationship that allows us to pursue common interests even when we disagree in other areas. let me now flush out might three proposals and explain how they will help us to reach that goal. my first proposal concerns the short term. i would like nato and russiazoño strengthen our practical cooperation in the many areas where we have a clear common interest. key among these areas is the fight against terrorism. the days when terrorism was a
purely local phenomenon have long passed. terrorism has mutated into a global transborder franchise. terrorists moved from theater to theater, from a rack to afghanistan, to the middle east to the caucuses, and several nato nations, as well as russia have repeatedly suffered the horrors of terrorist attacks. much has been done in this area. we agreed a joint action plan on terrorism. we have been looking at threats posed by al qaeda. we have examined the threat to civilian aircraft and to critical infrastructure.
we also analyzed the terrorist threats to our troops when we were engaged in bringing stability to the western bulkheads. in order for all this work to bring lasting benefit to all our nations, we need to give it another political push. let us agree, for example, to update our joint action plan on terrorism. another shared interest is preventing the proliferation of weapons of mass destruction and their means of delivery. many international experts believe that we are at a nuclear tipping point if north korea states nuclear and if iran becomes nuclear, some of their neighbors might feel compelled to follow their example.
such a multi-nuclear world is not in nato's interests and is now definitely not in russia's interests either. i believe we need to take a much more or look at the available options. we need to look at arms control as well as non proliferating products as ways and means of protecting ourselves against weapons of mass destruction. we can build on work that we have already initiated in the recent past such as our joint assessment of proliferation trends, risks, and challenges. this brings me to another area where russia and nato can and should work together.
this business of the fence. -- this is missile defense. yesterday, the united states announced plans with regard missile defense which can include an can protect all our allies. these plans will involve an even greater role for nato with regard to missile defense in europe. i welcome that as a positive step. in my view, the proliferation of ballistic missile technology is of concern, not just to nato nations, but to russia to. our nations and forces deployed in theater will all become increasingly vulnerable to missile attacks by certain parties.
starting ways to counter this threat is in nato's and russia's fundamental interest. we should explore the potential for linking the u.s., nato, and russia of defense systems at the appropriate time. i believe that the work we have already done on theater misfile defense -- missile defense, under the aegis of the nato- russia combination, demonstrates cooperation in this area. nato and russia have a wealth of experience in missile defense. we should now work to combine this experience to our mutual benefits.
afghanistan is another area where we can and should do much more together. we already have a pretty solid foundation of cooperation. we have long agreed that countering terrorism and assisting the afghan government in building a stable and secure country is in nato's and russia's common interests. indeed, russia has offered land transit two contributors and nato allies to facilitate our operation in afghanistan. this is most welcome.
we have advanced the professional skills of almost 1000 counter-narcotics officers from afghanistan and central asia. this is a good start and it should give us the confidence to go much further by examining, for example, how drug money and organized crime in general are fuelling international terrorism. we have a firm base of cooperation in relation to afghanistan on which to build. we should now look more closely into what else we can do together and how we could possibly further russian engagement. it is my firm belief that there is more that we can and should do together to help afghanistan to get on its own feet.
finally, maritime security, this is another area where i am sure that focuses possible in the short term as both nato nations and russia face the common challenge says of piracy and terrorism at sea. again, we have an excellent basis on which to build. on a national basis, russia has deployed ships to the gulf of adin to protect its shipping and incorporates, at the tactical level, with all other actors in that area. this includes several nato- member countries. nato and russia have already cooperated successfully in operation activity endeavor.
nato has invited russia to participate in this area and i hope they will still accept. as you can see, there is considerable scope for nato and russia to do more together and this will, i'm sure, help us to rebuild confidence and trust. but we need more than just enhance practical cooperation to address some of the more serious disagreements between nato and russia. hence my second proposal looks to revitalize the nato-russia council as a forum for serious dialogue. i firmly believe that we should use the nato-russia council
again in the way it was originally intended, not as a bear weather forum but as a forum where we can all air our differences openly and transparently. we're all security concerns are discussed. this includes russia's. take president dmitry medvedev ideas on a new european security arrangement. i am aware that the oec is the primary form for such a discussion and i am also aware that president dmitry medvedev's ideas have not turned to concrete proposals. to the greek -- to the degree that these demonstrate russians concerned about being
marginalized, i believe that a nato-russia dialogue could create good value. we must aim for a euro-atlantic architecture in which russia sees herself protected. as many of you are aware, nato has to start the process of drafting a new strategic concept. i plan to make this the most open, the most inclusive process in the history of nato or any other organization. it is a process in which we will engage the strategic community and use new media in ways we have never done before. it goes without saying that this open process offers an excellent opportunity for the
russian strategic to community to make its voice heard. now to my third proposal -- when i look at the recent russian security strategy until 2020, i realize that russia, like nato, is grappling with a new and rapidly evolves in security environment. this environment confronts us with challenges that have little in common with those of the past. i also firmly believe that it offers an ideal opportunity for enhanced cooperation between nato and russia. we should use the nato-russia council to identify those areas
where our interests converge and where further cooperation would be beneficial. this is why i propose that we undertake a joint review of nato and russia's common strength and challenges. we need an agreed basis which we can use to further enhance our practical cooperation. we don't have to start from scratch. nato and russia have conducted several joint assessment on specifics. we have agreed on an action plan on terrorism. what we need to do now, in essence, is to broaden this work. the agreement to conduct such a review would provide the nato-
russia council with an unprecedented, high-profile political position. it would be an unambiguous signal of our intention to work more closely together and to put our past differences behind us. it would represent a continuing new beginning for the nato- russia relationship. ladies and gentlemen, i am perfectly aware that the proposals i have just laid out our ambitious. the history of relationships between nato and russia and between the west and russia
cannot simply be ignored. not all are disagreements are simply based on misunderstandings. some of them are in fundamental in nature and hence, will not disappear quickly. i am aware that may 2-russia relations can quickly become hostage to domestic policies. in russia as well as allied nations. after all, the states of nato- russia relations is very much a reflection of the state of bilateral relations between nd russia.relations between my proposals will require realism. but also considerable political will. not just to launch them but
particularly to prevent them from becoming derailed by possible disagreements in other areas. carnegie's dmitri trinin described russia as being merely the planet pluto in the western solar system. in other words, while it is formally part of the system, it is located out on the fringes where is lonely, cold, and frustrated. this situation is neither in russia's own interest nor in nato's interest. nato wants russia to be a real stakeholder in european and international security. we need russia as a partner in
resolving the great issues of our time. although many in russia may still hesitate to agree, i predict that russia, sooner rather than later, will also come to realize that a more cooperative relationship with nato is very much in her own self-interest. ladies and gentleman, this new relationship will require a lot of hard work. if we manage to get away from the reflex of assuming the worst about each other and focus instead on our common interests, then we can make a
genuine new beginning in our relationship. in our on interest and that of the entire international community, thank you very much. [applause] >> we have time now for questions from the room and from the world wide web. there are microphones in each aisle. there's a gentleman right there. police -- -- police -- please -- >> i am from spain. you have made a very compelling speech, ecumenics speech, but you have also underlined the relationship between russia and
nato is hostage of the bilateral relationship between nato and russia. have you consulted the context of your speech with the allies and with the united states, with and withhat we ared states, with all in tune and it is not only your ideas but the ideas of the college of the alliance? >> thank you i take responsibility for my own speeches. as a long experienced politician, i always consult before i make major speeches and i have raised these issues with allies and several locations and
i am confident that i am within the framework of what is an allied consensus. >> yes, please? >> mr. secretary general, three points -- one, what would you like russia to do to get i ran under control and renounce its alleged intention to get nuclear armament? the second point -- you did not mention as part of your short- term priorities disarmament -- bilateral disarmament talks that installed and third point, what would you suggest with your old
hat as former president of the european union, what would you like the european union to do to strengthen their cooperation. you mentioned nato but there is also an important e.u perspective. i think both should go hand in hand. they should enforce each other. >> thank you very much. first about iran -- what i would expect is that russia will join us in putting a maximum of political and diplomatic pressure on iran to stop their nuclear aspirations. i think it is also in the interest of russia. second, i did not talk that much
about disarmament talks because this is very much a bilateral request between russia and, in particular, the united states. not that i underestimate the importance of it but this is the reason why did not focus on it in my speech. finally, about the european union, i hope it will be possible to conclude a new cooperation agreement between the european union and russia. the european union, for quite some time, has negotiated this with russia. i hope to see real progress. this is so that we can ensure parallel tracks.
>> yes, please. here we go. >> the queue. cs-- bank you. -- thank you. you mentioned the two sides should explore how to link their mental -- missile defense systems. right now, that cooperation is only in the form of desktop table computer-generated exercises and some exchanges of tracking data. i am not asking you to address the technical side but beyond that, how should the to connect their systems? what do you have in mind? >> it is somewhat technical. i am not a technical expert, i
am a politician. i do not think i'm capable of answering your question in detail. what i have done today is to announce our preparedness to integrate the systems or at least ensure cooperation at an appropriate time. that is the political part of it. i will leave the technical part of it to the technical experts. >> secretary general, we have a question from moscow from an expert at the eurasia heritage foundation who asks -- "do you think that cooperation between csto and nato is possible? chemical operating in afghanistan? khanate out regard them as a new partner or an ally against
terrorism? >> i would like to make three points. firstly, we have good relations with individual members of the csto. secondly, we have invited rotating presidency is of c sto to deliver briefings with them the nato-russia council and within the e a pc. we already have these kinds of context. however, at this stage, there is no consensus with nato as regards formal relations between nato and csato. >> bank. back to the room.
a gentleman for in the back. >> mr. secretary general, thank you very much for your presentation today. i think it is a courageous and ambitious plan. i like to ask you if you have read the recent survey on transatlantic opinions. it seemed a troubling tendency for european members to have less faith in the alliance. some of the interpretations of that have been, as regards to what happened last summer and the summer to the made in georgia and the impression among some member states of nato that the nato guarantee for its security is perhaps weekend. maybe this has been amplified by the recent decision to not go ahead with missile blessed defense's own public. when you are trying to greengage
with russia, what do you have to say tocsñ your new member states of nato with regard to their anxieties that are reflected in that poll? >> i would like to make two things clear -- firstly, it is a misinterpretation of yesterday's decisions if it is considered an appellation of missile defense in europe. it is not. on the contrary, the new plans will make capabilities ready sooner than the previous plans. they will provide us with broader coverage. as i said in my speech, these plans will make it possible for -- to include all allies and protect all allies.
so there is no reason to fear that these plants will weaken. my second point is that an improved relationship between nato and russia will also be to the benefit our -- of our eastern allies. it is beneficial for all of us to reduce tensions in europe. let me conclude by saying that nobody shoot down a commitment to article 5 in territorial defense in the nato treaty.
>> other questions in the room? right here in the front row. then we will go behind. >> thank you. i am from the international " herald tribune." of the two major sources of friction between nato and russia the russian of -- the russian -- you did not delve into details. do you still believe that the ukraine and georgia should eventually become members of nato? are you prepared to proceed with an improvement in relations with russia despite the continued recognition and the fact of the issues have not been resolved? >> let me reiterate that i
realize that we have real disagreements between nato and russia. there is no reason to hide that. however, we should focus on what unites us instead of what divides us. that is my first point. secondly, i will remind you that we have taken a very clear decision at the nato summit in bucharest in 2008, according to which ukraine and another country will become members of nato. that is unpleasantly understood that they fulfill the necessary criteria. we all know they do not, at this stage. nato foreign ministers have to fight it -- have decided within which we have initiated a practical corp. the ukraine aiming at -- with the ukraine
aiming at reforming the military. this is the current state of play. it is premature to make any predictions of future developments. i would stress on this occasion that we stick to the decisions taken at the bucharest summit in 2008. this is the reason why it is so important to embark on an open dialogue with russia on this. it is really my in addition to convince russia that=by the open door policy is not directed against russia. we have to provide an atmosphere and a security environment in europe within which the open-door policy can
continue while at the same time russia feels assured that this is not directed against russia. that is the challenge. it is difficult. if life was easy and -- there would be no need for politicians. [laughter] >> there are two gentlemen, either one. >> it is the same question. i am from a german television and i would like to know -- you said that russia and nato should work together in missile defense. can you elaborate on this? how can i imagine this new working together? is it just in adding up all the systems in missile defense or is
it something you have in mind that is more like a revolution? >> again, i have no intention to go into the technical details about this. what i have done is to give a clear political signal that once the technical conditions are fulfilled and once the political environment allows it, i think, it would be profitable to ensure integration or at least cooperation, to ensure that individual allies and partners can plug into a common system.
this is actually what we intend to do within the alliance and then i foresee that in the future, once the necessary conditions have been fulfilled, we could also envision russia plugging into such a system. unfortunately, i am not able to go into more details right now. here and now, the most important thing has to give the political signal. >> there was a question in the back? yes. >> mr. secretary general, thank you for elbowing your ambition -- outlining your ambitious plans for i.
i want to draw your attention on our backyard on a region that is a bit neglected which is the arctic region. we see an ever-growing activity up there, not only in the sector of the exploration of energy's or the transfer sector but also military leanings. we have a continuation of a violation of icelandic airspace, for example. my question is -- will this region be as discussed in the focus of the new strategy and if so, how you think could russia and europe and nato cooperate in this field of major importance? >> this is a very interesting
question. i can confirm that it will be one of the key issues to discuss when the elaborate. a new strategic concept. it is obvious that climate change will have a significant impact on our security environment. i will not go into details but it is much broader than just the arctic region. the arctic region is obvious. also, in a broader sense, this will be one of our major challenges in the years to come, to deal with the consequences of climate change. it is not being right of the focus yet. i think it will.
speaking about the arctic region, is obvious that climate change will employ that new c- groups will open. that we will see accessibility to resources that we have not yet been able to exploit. all of this will create more competition in the arctic region. we know from experience that stronger competition might also lead to tensions, including the risk of armed conflicts. i think we have to take this in consideration in due time. this is the reason why i intend to put this very high on the
agenda. i see a broad scope of cooperation between nato and russia in the arctic region. this is not only seen from a military point of view but they are also environmental issues big question of rescue operations and things like that. it is really, really a broad agenda and we have to address it. >> we have a question here. >> listening to your presentation and your emphasis on what unites us, i have reinforced my conviction that
nato should we branded. the north atlantic treaty organization is the past and we should create a gto, global treaty organization and then by other countries to join us. in that case, we need a new treaty, you are quite right because the current treaty states in article 10, that the alliance may invite any european country which is in a position to further the principles of the treaty and to exceed crude. ba the current treaty does not allow what you might call a global nato or global treaty organization.
i am not sure that it would be the right way to go. such a global organization would water down the core task of the current north atlantic treaty which territorial defense of deterrence. it has, during 60 years of being the court test of the organization and be the core task of future. however, we have to realize that in today's world, territorial defense very often starts out of the area. in that respect, you are right, that we have to embark anymore global approach. i see no contradiction between territorial defense and deterrence and occasionally out
of area operations. i think the current framework would be sufficient for a foreseeable future. having said that, i agree that we need partnerships. we need to expend its -- we need to expande it and other treatie. it is not only russia but i also announced, as one of my priorities, to develop further our partnerships with in the mediterranean dialogue and the eastern bull corporations. that is a number of countries with moslem backgrounds. i could point to countries like australia, new zealand called
predator -- we need a more global perspective. i still think the core should be the north atlantic treaty organization. >> we have a question for the web in brussels. do you think that europe and russia or nato and russia can work together to enhance peace and the balkans. ? yes indeed and actually we do. >> let me remind you that we joined efforts to bring peace and stability to the balkans. i do think that our experience
in the balkans is a success story. i have visited the region recently and i am pleased to see that conditions now seem to be fulfilled, that we can gradually reduce military presence in coastal. -- inkosovo. we will carefully examine the situation before taking new steps but i think we can see a clear profile in the direction of a reduced military presence in the region and in exchange, the european union will -- has already deployed and eu we have seen an excellent example of how we can work together, to bring
peace and stability to the balkans. >> yes, please, right here. >> i am from the university of antwerp. the threat of nuclear proliferation, given the link between nuclear proliferation and disarmament, more and more experts admit to that the president's comments, how is nato going to further delete some industrialized weapons and new prince george's county. is it a key necessity for defending our vital interests and will be a good idea for nato to withdraw the nuclear
weapons, the american nuclear weapons to be a good confidence- building measure? >> that is an interesting question. first of all, let me say that as a politician, i think we all have the vision and the ambition to live in a peaceful world without weapons, without armed conflicts, and without nuclear weapons. that would be a wonderful ideal world. let's agree on that. second, as i said, i am not a dreamer. i don't think i am.
i don't think we can make 100% sure that the world will become one of% free of nuclear weapons. if so, i still think it would be worthwhile, just in case, to having something to protect yourself. this issue will be a subject for discussion during the process of elaboration of our new strategic concept. it would be premature if i, at this stage, made any statements as regards the exact wording about this td concept.
it will be a matter of discussion among allies. i think we should take into consideration that we live in the real world but having said that, i would once again reiterate my vision of the ideal peaceful world without weapons at all. it should be the ultimate goal for all politicians worldwide. let that be our point of departure and from that, we can embark on what i will call real life. that is a real political answer. >> we have a question the back. >> i am from press td. t v. one of the reactions coming from moscow yesterday was the sudden
reversal of u.s. policy on the issue is a correction of an error, it was not a concession. was your reaction to this type of attitude? and do you have any indication from moscow that they will cooperate on iran. >> first of all, i don't have any indications from the russian side as regards their iran policy. as regards your first question, i am not sure that i understood it correctly. if you could repeat -- >> can you hear me? >> yes. >> one of the reactions from moscow was the sudden reversal
on missile defense. >> i am not going to discuss such wording. the reality is what i said earlier. the united states has no launched new plants as regards to to the development of of the it would be a misunderstanding to interpret that as if there will be no missile defense system in europe. it is not an abolition of a missile defense system.
would you see it feasible, not perhaps as secretary-general but as a politician, that my grandchildren live in a world where russia is a nato ally? >> first, about energy security. energy security is really a subject of great importance to our overall security. in that respect, it is also an item on our agenda when we are going to discuss our new strategic contract, definitely. and i would not exclude that
there are aspects of energy security, which also belong to the court tasks -- corp. tasks of nato, such as defense of critical energy structure. -- core tasks of nato. in a more broad sense, i do not think it is a primary task for nato to deal with it because of any more broad sense of the term energy security, it is much more about a reduction in individual countries dependency on imported fossil fuels. it is much more about broadening their energy sources, and here, i think we could develop a cooperation between nato and the
european union. because a lot of energy security aspects are more efficiently dealt with within the european union than within nato. as regards a possible future russian membership of nato, i think i should reiterate the wording in the nato treaty, according to which, the allies may invite any european country which is in a position to further the principles of the treaty, to exceed the alliance. russia is a european country, i think. so in that respect, it might be
a possibility, provided that russia fulfills the necessary criteria. quite another question is whether russia will apply. maybe it is a bit premature to make any predictions. i think a more realistic approach would be to develop a strategic partnership between nato and russia. >> secretary general, you have shown us today how you intend to proceed with fresh thinking and with candor and clear speaking. i think it is clear that your leadership signals not just a new beginning for nato-russian relationships, but for nato itself. the one that all friends of the alliance and all friends of peace would welcome. we thank you for your really interesting address and for your leadership. i hope that you will join me in thanking the secretary general.
before you do, let me remind you there is a reception next door, and i hope you will join us there. thank you again. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2009] w >> in about half an hour, we will hear remarks from white house economic adviser larry summers. he is the keynote speaker at the last session of a conference on global finance held at georgetown university. see those comments live at 3:30 eastern here on c-span. until then, a look at the obama administration's plans to drop a proposed european-based missile defense system. it is from this morning's
"washington journal." the issue yesterday. >> we will continue to speak with our allies, including the czech republi andc and poland, and i have reaffirmed our deep and close ties. together we are committed to a broad range of cooperative efforts to strengthen our collective dif -- our collective defense, and we are committed that attack on one is an attack on all. we have also made clear to russia that its concerns about our previous missile defense programs were entirely unfounded. our clear and consistent focus has been the threat posed by iran's ballistic missile program, and continues to be our focus and the basis of the program we are announcing today. in confronting that threat, we welcome the russians'
cooperation into a broader defense of our common interests, even as we continue our shared efforts to end it iran's nuclear program. going forward, my administration will continue to consult closely with congress and our allies as we deploy the system, and we will evaluate the threat posed by the ballistic missiles and by the measures we are taking to counter it. >> robert hunter joined us now. what is the practical effect of what the president said yesterday? guest: they have scrapped the missile defense system they were going to put in each republic and poland the capacities that
exists now, and it also will be effective against a more likely iranian challenge or threat from a shorter-range missiles. it is based on, according to the administration, new intelligence about what iran is doing, and an assessment of what the capabilities are. that is the very straightforward argument, and it makes a lot of sense just on the merits. host: can the president do this on his own, or does he have to get congressional approval? guest: i suspect that there is no problem, and in terms of scrapping the program, he can do that as commander in chief. host: you support this decision? guest: i support it very much. i never supported the idea of putting missiles that we do not have in an area where it might not work.
this is not just a tactical decision or an intelligence based decision, this is just international politics. host: we want to put up the number so if you want to talk about what happened with regard to missile defense yesterday, you can dial in and talk with ambassador hunter. 202-628-0205 if you are an independent. "obama under fire for u-turn on missiles," says "the financial times." guest: i do not think the problem is the decision, the problem is the way it was done. the timing is obvious. coincidence is a rare event in politics. there are three meetings coming up. the president is seeing the president of russia next week at the u.n. general assembly. then there is the meeting in pittsburgh at the g-20, in which
there were to have been talks about having more sanctions against iran over its nuclear programs. then there is the beginning of talks with iran, the so-called p5, the permanent members of the security council plus germany. where we went wrong is instead of going to the european allies and saying, look, you know -- we know you went on a limb on this and were willing to risk the ire of the lessorussians, instead of going to the allies and saying let's figure out where to go, we dumped the decision on them yesterday. it is not so much about changing the policy, it is, do we really matter to the administration when it comes to a major decision like that? it was more on the method than in the decision itself.
host: so if you were the current u.s. ambassador to nato when this decision was made by washington, what would you be doing today? guest: i would have said hold on a couple of days, i want to call my colleagues together, let's do some apparent consultation, because this makes a lot of sense if you explain it right. but come in the way it did looks like we were taking a -- but coming the way it did looks like we were taking a unilateral decision. we will be laying an all-out, and they will not lightly and go away and say what in heaven's name are the americans doing? they gave it to us without consulting us. the czech deputy prime minister talked about it. i read it in the newspaper, and now they're taking it away it is kind of a technical thing, but in terms of the way we did it,
it really does not help. host: nearly every newspaper this morning has an editorial on this issue. in "the financial times," "new u.s. realism on missiles plan, but there are anti-editorials this morning. most of them on both sides say the political reality sais -- guest: i think it is to make it a better climate with the russians because the united states wants them to help in putting pressure on iran. that is what this is about. how do you increase the pressure on iran before the talks began on october 1, and another little part which is to reassure israel that the united states will be deploying an anti-missile defense that is likely to be helpful to israel not against some iranian nuclear weapon that might come along some day,
against conventionally-missiles that the iranians are building right now that could strike them. host: where does benjamin yet in yahnetanyahu posit coming? guest: to try to get the russians to understand from the israeli point of view of how important it is to put pressure on the iranians to deflect the march toward nuclear-weapons. it is about getting the russians to be engaged. it is really about trying to reassure the israelis. the president has got this bind. he is trying to keep the reins from marching toward nuclear- weapons, but he really does not want to -- he is trying to keep the iranians from marching toward nuclear weapons, but he really does not want a war with
iran. host: there is an article in "the washington post" this morning about the sale of missiles to turkey. how does that fit into all this? guest: the turks have been worried about support from the united states ever since we invaded a muslim country, iraq, in 2003. the turks do have some concerns in the longer-term about the iranians and about the iranian missile program. so shoring up relations makes sense. this is a three-corner shot by the president, or a trifecta. it is all focusing on that meeting on october 1 of the western countries with iran. that is what the focus is on all of this. host: robert hunter served as the u.s. ambassador to nato from 1993 to 1998.
he was a former adviser to senator kennedy, currently a senior advisor to the rand corporation. what kind of officials to work on with the rand corporation? guest: i just worked on a new security structure to the persian gulf to enable us to fulfil our responsibilities wwithout being so -- so we can start focusing more on other things. host: he served on the national security council under the carter administration. rowland, a republican, you are the first on with robert hunter. caller: ambassador hunter, in the preliminary with peter, i was going to ask questions about how this i think is exactly@@@@@
russia does not appear to be doing a lot of things in our best interests. we have to, as a strong leader urging strong asian and leader in this world, we need to make decisions that are good for everybody and in our interests -- we have to, as a strong nation and leader in this world. it is a bad form, i think, and i would hope that obama would take a little bit more care -- president obama would take a little bit more care in exercising this decision. one question, ambassador, and i wish you good luck. were you in favor of the persians when you are willing to put them in eastern germany?
guest: the so-call-- a lead it t of the west europeans to wonder about the guarantees to them. beginning with jimmy carter, carrying on with reagan, we deployed some persian missiles and some ground launch missiles and negotiated with the russians, and eventually the negotiations went to zero. with regard to the russians, i did not like this particular system and the czech republic and poland to begin with. they were not particularly happy, but you cannot change the way we changed it without people wondering what we are up to. what we need to do is work constructively with the russians on things that are in our interest, but at the same time, we need to draw some red lines against doing again what they did in georgia, against what they might do in ukraine.
as a result, i think we are going to do some fast footwork right now to show the central europeans that they have not fallen off our radar screen. host: valerie, baltimore, maryland, a democrat. caller: good morning. mr. hunter, i had a question about the comment you made that you thought the decision that the president made was clearly political at the highest level, and i just want you to explain that a little further. thank you. guest: i did not mean political in that sense, but it dealt with high politics in international relations, namely to try to build support for factions against iran if it is not prepared to be more cooperative on its nuclear programs, to try to get the russians on board with that, to try to reassure the israelis about their security, and in effect to try to shape a situation in which we
will be more in the driver's seat in dealing with iran and some people think we might be. i do not think the president made this decision for any domestic political reasons. he was trying to fit together a series of issues, and i think he had the right decision. i just wish he had done it differently with the allies because it will take awhile to get over some bruised feelings. host: mike mike garrett tweets -- "do your thing that latimer -- guest: i think it is misplaced great the russians dug holes for themselves. when this was first argued about, they said this is a threat to russia. it was never a threat to russia. there were going to be 10 interceptors, and the russians have 2000, 3000 nuclear-weapons. they knew that was happening, there were trying to intimidate central europeans. when the united states went forward with that, the russians
just looked a little bit stupid. this does help the russians save a little face, but the objective is to get the russians to be cooperative on what the united states wants with regard to sanctions on iran. maybe it will work, maybe it will not. but i suspect the russians will be a little bit less ought to read them they were before, and that is an achievement. host: "nato secretary-general rasmussen has urged the western alliance to -- guest: this was pose under the bush administration and it makes sense. the real problem when you get to it that the allies can agree upon and the russians can agree upon is shorter range missiles, which are more likely to be deployed than the longer range things by iran or somebody else, and also missile systems that can help protect troops in the field. we are building them, some
others are building them, the russians are building them. this is an opening that can be built upon in which people will agree, hey, as a potential threat there, why don't we combine it? you have to remember that even when we propose putting these lager-range these defenses against long-range missiles in the czech republic and poland, the russians said instead, why don't we put them in southeastern russia to help protect us as well? in effect, this is a move that will enable the russians to feel a sense of greater security from the system then from the one we just scrapped. host: from "the new york post," "putin pushed, buckled." kentucky, you are on the air. caller: i have tno love for the
soviets and now the russians, but i think the former warsaw pact emasculates the russians in much the same way that our allies inflicted on arab nations for years and years and led to some of this terrorism that we have right now. it putting us around the russians really serves no strategic or tactical advantage to the united states or to nato, but it does put the russians in a position where they cannot control the countries surrounding them. we would not like to have the russians missiles in mexico or canada, and i can understand their point of view. georgia has been a member of nato when their idiotic president launched an attack, and we would be in a bad
position with georgia. guest: one thing the russians have to understand completely is that these are free and independent countries, and we have to constantly reinforce that. but i do agree that the idea of putting these missile defenses in poland and the czech republic really did not help to reassure the russians that we did not have some kind of taking advantage of the fact they lost the cold war. in 1987 when we were expanding nato, taking in new members, nato reached an agreement with russia to have a relationship with nato. one of the pledges in that was that we would be not putting permanent military forces in any of these countries. so i can see the russians saying, wait a second, these missile defense systems might be something a lawyer can justify, but it surely drove the spirit
of that agreement. it played badly with the russians -- is surely broke the spirit of that agreement did badly with impressions that we do not have any attend -- host: "i think the idea is to be more mobile and to go where we need to go on short notice." is that true? guest: absolutely. the eagis system, we can put it wherever we want. we have these new things called the standard missile that will do a better job defending against one of the iranians can deploy, i accurately -- high accuracy, troy range against missiles, that could come along any time now. host: right now if iran for any reason launched a missile, is there any defense against that? guest: absolutely. host: so what is needed here?
guest: the iranians do not have a lot of missiles right now the israelis, that would probably be the target, have the arrow, and a very fancy radar called the expand radar. host: developed in israel or or developed here? guest: developed in the united states. we have an awful lot to deal with whatever the threat, if somebody when iran were so stupid to launch one of the@@ but this is reassurance. not that war is coming, but how do you reassure the israelis? how do you reassure the turks? how do you tell the iranians that no matter which way they go, it will not make any sense.
sit down and bargain seriously to get rid of the fears that people have that they are going to get the bomb. >> is there a school of thought in washington at all this as we do not need any of these systems? guest: i don't think so. you never know. you want to insure against the future. it may cost some money, but i would rather waste the money then wake up and find out sunday that there is a ballistic was -- missile. we have actually been working on this. maybe they will work effectively, maybe not, but if you were thinking of launching an attack and become subject to retaliation, they make you think twice. three times. host: thanks for holding. you are on with robert hunter. ♪ good morning. you are my kind of guy. i would love to sit down and pick your brain for hours. -- caller: good morning. i voted for george w. bush, the
first time. turned out to be a mistake. a couple of points. rumsfeld was annulled by nixon, i believe, in 1977 -- rumsfeld was told by nixon. i think she knew better, and that leads me to believe this whole thing was intentional. it was not a mistake going into iraq. this whole thing to me is quite orchestrated and deliberated. somebody needs to tell me when george bush said he is protecting europe, why would iran want to blow up paris, amsterdam, london? what would be his motivation? he would be killing his own people, and he would be annihilated. guest: that is one reason i never thought very much of the system to begin with, but what we are doing now does relate to something that could come into being.
that is shorter range of iranian missiles more likely to be targeted against israel than anywhere else. el. even as they do not use that, it helps to reassure the israelis. the united >> will leave this recorded program now and take you live to remarks by senior white house economic adviser, larry summers. he is the keynote speaker at this last session of a conference on global finance, hosted by georgetown university's school of business. >> thank you very much, george. i want to thank you all for being here today. i wish to thank the many george town board members for participating in today's conference as well as our finance faculty. chris outstanding efforts have made this event possible. -- whose outstanding efforts have made this event possible. it is my pleasure to be with you
here today as we host our first official event in this building. this facility provides a new home for our school of business, a home that will enable our students to meet the challenges of a world where people are increasingly interconnected and nations increasingly interdependent. it is very fitting that we hold this conference on the future of global finance here, and it is very fitting that we hold it now, as we know that it was exactly one year ago in mid- september that the global financial crisis of 2008 became particularly acute. international stock markets crashed and entered a period of extreme volatility. banks in the u.s. and abroad began to fail. the global community was faced with the greatest economic crisis since the great depression. all of us gathered here today, whether in government, business, media, or academia, are involved in discussions or in teaching ideas about what economic
reforms are needed to prevent another global financial crisis. in order to do so, as this conference acknowledges, it is particularly important to focus on the regulation and restructuring of our global financial markets. in all of these discussions and very much in the spirit of service that has enlivened georgetown for over 200 years, we also need to remember one thing -- we need to remember that free market wealth creation, that economic relations between individuals and nations, the distribution profit -- distribution of profit and what must be conducted with concern for the common good. if we forget this, then all of our work means little. one person who has long worked for the common good is our keynote speaker today, larry summers. he is the current director of the white house's national economic council.
until his appointment in january this year, he was the charles w. eliot university professor at harvard. throughout his career, he had shown both an extraordinary capability to address the challenges presented by modern capital markets and an exceptional compassion for the neediest in the global community. before coming to washington, he had a distinguished academic career teaching economics at harvard and mit. from 1991 to 1993, he served as chief economist at the world bank where he played a key role in designing strategies to help developing countries. later as undersecretary and deputy secretary of the treasury, he was instrumental in creating a u.s. support program for mexico in the wake of its financial crisis and in crafting the international response to the asian financial crisis in 1997. during his tenure as secretary of the treasury in the clinton
administration, the united states marked the longest sustained economic growth in our history. internationally, he focused on addressing the challenges presented by modern capital markets. his work with the international monetary fund contributed to a more effective surveillance of financial vulnerabilities, greater transparency, and -- in the global finance the system and the introduction of new lending facilities to deal with accountable account crises. he was also a key figure in securing significant expansion in aid for the world's poorest and most indebted countries. this led to an increase in healthcare and education in a number of the world's neediest countries. at the end of the clinton administration, dr. summers returned to cambridge, where he served as the president of harvard university. he has a bachelor's degrees in economics from mit, a ph.d. in economics from harvard. his research contributions were recognized when he received the
john bates clark medal, given every two years to the outstanding american economist under the age of 40. he was also the very first social scientists to receive the national science foundation's alan t. waterman award for outstanding scientific achievement. he is a member of the national academy of science and has written extensively on economic analysis and policy. it is a special day like today for the georgetown university community when we inaugurate this extraordinary building in this hall with this very special conference. it is especially a privilege for me to have him with us today to provide his insights. ladies and gentlemen, dr. lawrence summers. [applause]
>> jack, thank you very much for those kind words. you described a number of different areas in which i have worked. when i first came to washington, people asked me what was different about working in the treasury department from researching and teaching economics at a university. i used to say that as a professor of economics, the single worst thing you could do was to sign your name to something you have not written yourself. on the other hand, as a government bureaucrat, it was considered a mark of effectiveness to do so as frequently as possible. [laughter] and then, i went back from washington to serve as harvard's president.
people used to ask me, "well, what's different about being harvard's president then working in the government in washington?" i, in those days, gave an answer that as i think about it today was breathtaking in its naivete. i used to say, "washington is so political --" [laughter] not everybody is rooting for you to succeed in an objective. i might give a slightly different answer today, but in any event, i am very grateful for the opportunity and i'm now having to serve as the director of president obama's national economic council and especially glad to have this opportunity to
participate in this celebration of a great business school that is part of a great university at an absolutely critical time. after what we have seen, i think we can probably agree that there may have been no moment in the last half century when the set of subjects that are studied in business school -- finance, effective organizations, productivity, and efficiency -- they're probably has never been a moment when those subjects were more important to the national and to the global interest. what i would like to do today is talk about one aspect of what is very much a focus of study here, which is the functioning of a
healthy finance system. in many ways, we all take what the finance system does for granted, but if you have never thought about it before, you would think that it was something slightly remarkable. in our society, we have millions of households, who want to save for a rainy day or for their retirement or to send their children to college. we have businesses that need financing for their inventories, that have great ideas for entrepreneurial visions, that want to refurbish a depreciating planne. what the financial system does is performed the profoundly important task of bringing them together, of providing the business that the capital needs while at the same time providing
the house will with the opportunity to hold their savings in a secure form where it multiplies with the passage of time. there are few more important questions in any economy and how well this job is done. when it is done better, households earn more on their savings, and more investment can take place because businesses can borrow at lower cost. think about this -- in a typical economy like the american economy, where the capital output ratio is 3, improving the financial system even a little bit so that projects invested earned an extra 20 basis points is enough to raise the gdp over
time by 6%, and there are not many economic issues that loom that large. so the question of the financial system is of profound importance. the question of financial innovation in its management is critical. some time ago, when i was last in government, i compared the modern financial system with all of its innovation to a jet plane. the invention of the jet plane got people where they were going faster and more comfortably, and that was a clear improvement, but the crashes, when they happened, were that much more damaging and spectacular. and we are seeing something similar with financial innovation. after the last two years, it is increasingly appropriate to ask
whether this particular jet plane should be kept in service with the same set of controls or at least whether our regulatory regime is adequate for the future. because we have been reminded of a great deal about financial instability. to be sure, we have made enormous progress. when the president took office, the most salient question was whether the recession would become a depression. today, the salient questions involve date in the end of the recession and envisioning the recovery -- dating the end of the recession and envisioning the recovery, and so it seems a good time to take stock. here is perhaps the most fundamental reminder. when you study economics, perhaps the most important thing you learn is about the self
stabilizing character of markets. we go through lots of examples which students. the basic idea of which is that when there is an excess supply of wheat, prices fall, people grow less. people consume more, and the markets we equilibrates. that is what adam smith had in mind. the metaphor that we often used for this self-equilibrating property of the market, is a thermostat in which things return to their natural level. that is the right way of thinking about markets. the vast majority of the time. but it was keynes' central insight that two or three times a century the self-equilibrating properties of markets breakdown, and stabilizing mechanisms are overwhelmed by mutually reenforcing vicious cycles.
the right metaphor ceases to be a thermostat and becomes an avalanche. consider some of the vicious cycles we have seen in the last few years. the liquidation cycle when financial assets of our value, which forces there sale by those on margin, which closes the prices even lower. a deleveraging cycle where lower prices on institutions, on assets, cause institutions to have less capital, which leads to less lending, and even more asset devaluation continuing the downward spiral. a credit accelerator cycle in which a weakening economy leads to a weaker financial system, which leads to less lending, which leads to a weaker economy. a keynesian vicious cycle in which lower spending leads to lower employment leads to lower incomes leads to lower spending -- continuing a cycle. and a panicked vicious cycle in which individuals seek financial
institutions in trouble, rushed to withdraw their funds, putting those institutions in more trouble, causing others to rushmore to withdraw funds -- rush more to withdraw funds. starting in two dozen 7 but accelerating a year ago this week, these five mutually reinforcing, vicious cycles created a situation more dangerous than anything most of us have ever seen. they created a situation in which we could not rely on the market's capacity to act. in which there was no alternative to strong public action. president obama's economic recovery and financial stabilization program was premised on exactly this idea of containing vicious cycles. supporting spending, income, and
the real economy in order to support the financial system through a direct program of increased spending and reduce taxing, through the recovery act. and supporting the real economy by supporting the financial system through clear commitments to stand behind major institutions and through a major emphasis on transparency through the stress tests that ultimately forced substantial raising of private capital. the results are becoming clear. the recovery program, the fiscal stimulus, and the financial stress tests have served to quell panic, drive capital raising, and ultimately turn vicious cycles into virtuous circle. today, instead of money going into financial institutions from the government, we are seeing money come back to the
government. with the passage of time, these efforts should permit the normal processes of economic growth to greengage, rising incomes and employment, greater credit flows, increased credit spending, stronger american global economy. -- american and global economy. the consensus is that we should expect to see economic growth at a significant rate during the second half of 2009. yet, despite the normalization of financial conditions, despite the indications of economic growth, we must remain vigilant. concerns remain in many sectors, such as commercial real estate, and the availability -- that the availability of capital and credit remain too tight for too many. as president obama has said, the
crisis has been a long time in the making, and we know we cannot turn it around overnight. recovery will likely be measured in years, not weeks or months. but we also know that our economy will be strong for generations to come if we commit ourselves to the work that needs to be done today. we will not make the mistake of prematurely declaring victory for withdrawing public support for the flow of credit. such mistakes were made in the united states in 1937, and they were made in japan at several junctures during the 1990's. they provide a cautionary tale. and get -- yet, even as we remain vigilant to ensure continuing expansion, it would be irresponsible for us not to
learn the lessons of what took place and focus our efforts on assuring that our system becomes much less vulnerable to this kind of instability in the future. whatever plausibility the view that the right posture for policy is to not seek to prevent crisis, but simply to respond aggressively after crisis takes place. whatever plausibility that view may once have had, it is much less plausible after the events of the past two years. just as the cuban missile crisis spurred a focus on arms control and a reconsideration of the then prevailing system of mutually assured destruction, the events of the past two years
have raised grave concerns about the soundness of current public policies towards the financial system. these concerns are framed often as the need for regulators to do a better job, and they do need to do a better job, but to frame these issues only in terms of the quality of regulators' judgment is, i would submit, to frame the issue too narrowly. consider this -- much financial instability is the result of a simple and natural human phenomenon -- people do today what they wish they had done yesterday. thus, on the upside of every financial bubble are a large number of investors who buy assets not based on fundamentals but instead based on an extrapolation from future past price increases to future returns.
financial crises are the result of an overly prevalent and complacent conventional wisdom. complacency -- this fear is what robert merton called a self- denying prophecy. as the expectation that assets are safe and will continue to rise in value results in excess of investment and excessive lending that sends the sense of the inevitable day -- that sense of the inevitable gains give way to collapse. i stress this point because it is important in thinking about the regulatory context. even the most able and dedicated regulators embedded in an environment that comprises those they regulate in a broadly
political community cannot be relied upon to be unveiling stalwarts against income into was impure experience suggests that rather than trying to perfect human judgment, policy can succeed by making the inevitable imperfections less costly. i have already compared the financial system to a jet plane. let me suggest a different transportation analogy, automobile safety. from the time of henry ford through the late 1950's or early 1960's, we had a paradigm in this country were thinking about automobile safety. it was that drivers needed to be better. we needed to have more driver education. we needed to have better deterrence for unsafe driving --
better deterrents for unsafe driving, and it would just had drivers be better, we would have better automobile safety. we had that paradigm for many years, and every year we had that paradigm, the number of automobile fatalities in the united states increased. how certain moynihan's first important contribution -- patrick moynihan pose a first important contribution was the paper he wrote on automobile safety in the late 1950's in which he urged an epidemiological approach. it was recognition that improving human performance was a necessary but insufficient strategy. much better results come from assuming that's human corm ridiculous performance -- much better results come from assuming that improvements in human performance alone cannot
make it stick. we must come from consequences of focusing on human psychology rather than changing human psychology. the conclusion was that a much more effective approach to automobile safety would be one in which the automobiles and the highways would be billed to be much safer in the face of the human imperfections and errors that were inevitable. so, too, in addressing financial regulatory reform, i would suggest as a first crucial insight that we focus not so much on making people better but on recognizing that human psychology is what it is and
that what we can influence with public policy is the incentives that people face and the consequences of the errors that they will inevitably make. in creating this safer system, a paramount issue must be incentives. a set of issues that economists refer to as a moral hazard. consider the consequences of enabling institution to borrow in a free market system with a government guarantee, either explicit or implicit. its incentive is to reduce capital since more capital reduces the return on equity. it discourages risk-taking. because with small amounts of capital and a government
guarantee, increased risk taking is a heads -- i win -- tales -- the taxpayers lose -- proposition. it attenuates what would otherwise be a strong incentive for lenders to monitor carefully how financial institutions use their money. and it creates a lowest common denominator dynamic in which the imprudent, those who are willing to lend to the lowest spread, to overpay for assets, or to operate on to then a capital margin, make it difficult or impossible for competitors with better intentions to take the prudent course. we cannot discount the risk that some day excess of reliance on the idea of too big to fail may lead to financial institutions that are too big to save with disastrous consequences.
new regulatory approaches that recognize the importance of incentives, that recognize what is probably inherent in human psychology, are, we believe, essential. and we believe it is critical to move rapidly while the events of the last years are clearly in mind to put them in place. following from this philosophy, there are five common-sense principles that president obama believes any regulatory reform must meet first. all -- must meet. first, all systemically important financial institutions must have adequate capital.
substantial capital requirements attenuate any moral hazard problems by ensuring that lenders are relying on capitol rather than the perception of guarantee. they reduce the ability of shareholders to realize on a heads, i win, tails, taxpayers lose dynamic. they provide a caution. they provide a reserve that ensures that even when mistakes are made, the result is not to threaten the ability of institutions to meet their debt obligations, and so support system taxability -- systemic stability. raising capital requirements in an enduring way was the subject of an important paper that
secretary geithner discussed with his g-20 colleagues just a few weeks ago, and it will be a major issue on the agenda of the g-20 when it meets in pittsburgh this week. i do not believe that any regulatory reform that does not succeed in raising capital levels will meet the challenges of this moment. the second critical issue is resolution of authority. -- resolution authority. our financial system will not be failsafe until it is safe for failure. economic and financial historians will debate for a long time the wisdom of the choices, the alternatives that
might or might not have been available to the authorities as they faced the problems at lehman and aig a year ago. what was beyond debate is the unsatisfactory character of those choices. it is wrong that taxpayers, thousands of miles from wall street, should be at risk because our system gives authorities no choice but to commit tax payer money or to accept collapse and chaos. it is essential that we develop means of managing the failure of financial institutions. because without the prospect of
failure, it is difficult to contemplate the application of market discipline. there is a really good line here that makes this point very vividly about financial institutions without failure not be in light -- not the end of like a religion without debt, but at georgetown, best being not tended to go into that speel. [laughter] third principle, again thinking about incentives and thinking about inevitable imperfections coppe, eliminate regulatory arbitrage. financial institutions should not be able to choose among competing regulators. if they can choose among competing regulators, they will,
on the basis of who regulates least, who sets the lowest standard. it is not reasonable to expect that regulators will happily see the set of institutions under their jurisdiction shrink dramatically, and so is inevitable that if regulatory competition as possible, either between the regulatory agencies within a single country or between regulatory authorities in different countries, competing to regulate particular institutions, that you will see a race to the bottom. .
>> cars will go off the road and hit a tree. or should speed limits be set with a view to the fact that if all of the cars are going to fast, then when one car has an accident, paperback a pilot will be too harsh -- a pile up will be too harsh. no one would imagine setting speed than its without thinking about the possibility of multi car accidents. yet our traditional paradigms for financial regulation has focused on the prudential regulation of individual institutions rather than the interconnections that comes from
them functioning together as a system. we can no longer take an institution by institution approach. any market such as the derivatives market that is so large and interconnected that its breakdown would threaten the stability of the financial system must be subject to comprehensive authority. finally, it is our judgment and it comes from the same kind of reflection on the incentives, the consumer financial issues must be carried on by a regulator whose interest is the mandate of the consumer rather than the profitability of particular financial institutions. in light of recent events in the mortgage market, the prevalence of predatory lending practices
and the and equity of problematic practices in the credit-card market, we have become convinced that it is essential that regulation be carried out by an independent body whose mandate is exclusively consumer protection. this idea, which one might not have supposed would be the most controversial among these principles, has generated substantial controversy. advertisements are being run on behalf of florists and other main street merchants suggesting that somehow we envision a regulator that would make it impossible for a florist to extend credit to one of their customers.
i doubt very much that any florists are paying for those advertisements. i would suggest that those advertisements are the financial regulatory equivalent of the death panel advertisements that are being run with respect to health care. those with an argument make it. those without a good argument cry to scare people. that is what is happening here. this is a critical issue, one in which the president is determined. a separate consumer regulator will do much to protect consumers from the abuses that have become all too clear in recent years. taken together, if we can adopt
this philosophy and implement a program based on these principles, we can at the same time address other issues like compensation, where incentives are obviously a crucial aspect, i believe that we can create a system that is much less vulnerable than the system that we have today. we can create that system while at the same time preserving and indeed strengthening the very great benefits that the financial system performs in terms of allocating capital and in terms of permitting the better sharing of risk.
that is a crucial challenge in the years ahead for all of us involved in finance. it is a crucial challenge for spurring the economy. and it is one piece of what ultimately is the mission of this presidency, to reestablish a foundation -- to the established a foundation or more increasingly growing american economy than we have seen in the last generation. if you think about it, the boom of the 1980's ended with the 1987 stock-market crash. the boom of the 1990's ended with the bursting of the internet bubble. the boom of this decade ended with the financial crisis that began in 2007. our challenge is to create
economic expansion and growth and not based on financial bubbles, but instead based on real production and distribution of goods and services for the benefit of all citizens of our country. there are many parts of this agenda. the new american economy needs to be more export-oriented, more environmentally-oriented and less energy production-oriented. more civil engineering oriented and less -- and more oriented to the interests of the middle- class. i would suggest that a stronger, better regulated financial system is crucial for all of that, and all of us working
together can do much to bring about such a financial system. thank you very much. [applause] >> we have time for a few questions. in retrospect, was it a good idea to repeal the provision separating traditional banking from banking insurance? >> i think i have to go meet my plane now. [laughter] i said a variety of nice words about georgetown university. i should also take knowledge my friends at "the financial times"
who are a sponsor of this conference. i say this with some hesitation having briefly been a columnist in their pages. look at my staff. they are sitting there in agony wondering what i am going to do next. for those of you who are interested in following the debates that i talked about, there is no daily in the world in quality that "the financial times" is. it provides a major service to the world in the way it covers these debates. now that i have distracted you from the question -- look, we have to think a great deal in the years ahead about
the rules on financial combinations. with respect to the glassy go de-regulation, i would make these points. first, there were no mergers between banks and investment banks from the time of the repeal until after this crisis had begun when the bank of america-merrill lynch merger took place. in particular, the combination of citigroup and solomon brothers had already taken place under this system. i don't think the suggestion that somehow this repeal caused all of this and no new mergers took place is a plausible one.
second, the evidence in many ways the suggests that insufficient diversification was a crucial problem. what, after all, were the critical problems? lehman brothers, which was a stand-alone investment bank, bare stone -- bear stearns, which was a stand-alone investment bank. look at their countries that escaped the major carnage that the united states the escaped. i think canada is a good example in this regard. they have not had nearly the financial dislocation that we have had, despite having many of the experiences, and to north america. they established a diversified
set of institutions several years ago. indeed, a large part of what is enabled the resumption of stability at the moment of panic was the conversion of morgan stanley and goldman sachs to enable them to get access to the discount window. the combination of merrill lynch and bank of america. so i don't think the argument that somehow if you separated investment banking activities and commercial banking activities, you would not have had the crisis. excess of separation between them may have led to more crises. at the same time, i think it is
important to recognize that the concern behind many of the discussions of glass steagall is a very real one. that is the necessity of, if you are going to have financial institutions that have access to a discount window, that have some potential for support, the need to control their risk taking in a major way. so that impulse is the right one. it is failure to take place to insufficient extend is obviously a critical part of the problem. but our judgment is that the right levels of control on capitol and leverage, the right kinds of capacity to create failure, the taking of a
systemic approach is probably a better way to contain those risks than to put restrictions on what type of activities an institution engaged in one thing can also engage in. >> thank you. the next question has to do with china's appetite for treasurys. and what that might do in terms of our policy. >> yes. we have a substantial appetite to borrow, and they have a substantial apatite to hold reserves and lend to us.
that is a relationship that has been very substantial in our mutual interest. it has been a very much source of support for both economies. i think it raises what is a question, whether china holds the debt or whether anybody else holds the debt of how we think in the united states about the accumulation of government debt. i believe very strongly that we did the right thing. we did a necessary thing by substantially increasing the government budget deficit as part of stimulating the economy. if we had not done that, the
consequences would have been much more serious, economic collapse, collapsing tax revenues, far greater need for government spending, and ultimately much more debt. the steps that were taken to protect the economy protected the financial system and protected our health in very important ways. but as the economy recovers, as private sector borrowing increases again, it will, as the president has said many times, be necessary to bring down the budget deficit in a substantial way, to contain government
borrowing, and to limit the size of the federal government's role in the debt markets. it will be important in terms of our financial relations with china but equally with the the world in both the public and private sector. that is going to be a crucial objective of government policy as well. i would say this is just one of the reasons why it is important to pass the president's health care program. if you study the federal budget in the long run, you cannot construct a scenario in which the federal budget is healthy in 2013 and in which the growth of health care costs have not started to be contained. you just cannot do it. and, you bring down the growth rate of health care costs, not by overwhelming amount, 1% or
2%, it has a profound impact on the federal budget picture. so addressing the issues in our health-care system is critical, not just as a moral issue for americans, not just because of the contribution that it will make to health, not just because of what it will mean to the competitiveness of businesses, but also because it touches it things as a seemingly remote as our financial relationship with china by enabling us to go after the budget deficit. there is a reason why this has become such an important issue for president obama in the first year of his presidency in the midst of an economic crisis.
whether it is the competitiveness of american firms, the security of american families, or the standing of the united states in the global capital markets, addressing health care is of absolutely critical importance. >> this will be the last question. many believe that the commercial real-estate bubble is just guarding to correct itself. how do you see this affecting financial markets over the next few years and how do you think we should go about preparing for this? >> jpmorgan was once asked a question of the same kind. he was asked what he predicted what would happen to the stock market. he paused. he leaned forward to his audience.
i was going to say he leaned into the microphone but it occurred to me they probably did not have microphones. he said, "in my judgment, based on my years of experience in the markets, going forward into the future, there will be fluctuations." [laughter] i think that is a reasonable prediction. [laughter] with respect to commercial real- estate, i don't think there is any question that there is real substantial distress in that sector. you have already seen a substantial price adjustment.
unlike in the early 1990's, there is much less evidence of very high vacancy rates for very large over building. the problem appears to be more financial. unlike the -- unlike in the 1990's, it appears to be a problem whose locust is let -- whose focus is less towards the major financially important institutions and more towards regional and smaller banks and other financial institutions. it is obviously something that is going to require to receive
attention. the treasury through its various credit facilities has provided some increase liquidity to the market. the treasury made a announcement of mind-numbing complexity that i will not seek to summarize that will permit the most -- the much more effective working out of distressed real-estate then what was possible previously by permitting renegotiations without triggering tax penalties. these issues are going to
require continuing attention to and by bank regulators. ultimately, there are all of those vicious cycles that are operable in commercial real- estate and there is the potential for them to become virtuous circles. as the economy starts to recover, the demand for space will increase. that will provide support for cash flows. that will provide support for asset values. that will provide support for lenders. that will provide support for asset values. this is how these situations work through. it is a matter of real concern. it is something that we watch
closely. but i believe if the broad economic strategy is successful, it will provide considerable support in managing the challenges associated with commercial real-estate along with specific targeted measures, like the ones that i mentioned. thank you very much for the opportunity to be with you. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2009]
>> saturday, elena kagan on her work as u.s. solicitor general. her thoughts on whether or not cameras should be allowed in the courtroom. it airs tomorrow at 7:00 p.m. eastern on c-span. this weekend, the best-selling author of "into the wild." he talks about his new book. >> congressman ron paul wants to
hold the federal reserve accountable for the economic crisis. he wants to end the fed. on sunday, he talks about his new book. follow us on twitter for the latest schedule of dates. >> now, secretary of state hillary clinton on the upcoming united nations general assembly meeting underway this week in new york. this event is hosted by the brookings institution and is an hour. >> the good morning to all of you. it is my pleasure to welcome all of you here to the brookings institution this morning and particularly to the distinguished members of the diplomatic corps who are with us this morning. it is a great honor for the brookings to have secretary clinton with us. the engines that you came in
this morning may have the swinging doors abide it is actually a revolving door figuratively speaking. brookings scholars have passed in both directions as they have gone into and out of public service. since inauguration day, eight of our former colleagues have gone to work in foggy bottom, and other diplomatic missions around the world. i am sure there -- i am sure they are very proud in helping you with the important tasks that you are doing. starting on monday, the secretary is going to plunge into an annual week-long marathon of a bilateral and multilateral diplomacy at the united nations general assembly. thshe will, in a moment, give ua preview of the issues,
challenges, and the objectives that are most on her mind. i have not read her speech but this much i can predict. because it is already a signature theme of her stewardship of american foreign policy. that is her conviction that promoting human security is related to the strengthening of national and international security. from her first remarks at the department of state after her confirmation back in january, she has included reference to development almost every time that she refers to diplomacy and to defense. 13 years ago, she made famous and made into a personal motto the ancient african proverb, "it takes a village to raise a child." a variant of that might become it takes a strong community coming together to ensure the
well-being of its weakest members, including its children who are after all the vanguard of future generations. the u.n. represents that larger community of which we are all apart. our country is fortunate to be represented by secretary clinton next week and we are grateful to her for being with us today. after her opening remarks, i will come back up here and join her while she takes some questions from all of you. [applause] >> thank you. thank you very much. if it is a delight to be back here at the brookings through
that revolving door which really does go both directions. i spoke with strobe sure lee after i was asked to take this job as secretary of state and began thinking about who needed to be in this new administration. he said, "i know you are going to decimate the place." yes, we are, but that is all part of the revolving door, people who go in and out of administrations, who do the work every day here at the brookings, such high quality work. i am very grateful for this farm team that you have led so well for so many years and the opportunity to work with them now in this new capacity. i also want to say a word of
personal appreciation to strobe. most of you know, he has been a friend of mine has been the's and mine -- he has been a friend of my husband's and mine. i also want to thank others for their leadership. and to all of the diplomatic corps, the ambassadors who are here with us today, i thank each and every one of you. i have had the opportunity to do bilateral meetings with most of you, with your foreign minister or in some instances the head of state and i appreciate you being with us today. i also see some of the wonderful people who have joined the team who are here as well.
i express my appreciation to all of them. i thank brookings institution for the opportunity. henry kissinger was famously critical of unga. others have been expressing over the years their concern and disappointment with the united nations. but i believe that at its best, the united nations is not only a critical central institution bought one in which the united states has a lot of equities. i am actually looking forward to it. it is a personal as well as an official obligation that i am looking forward to.
let me begin by echoing the president's statement yesterday, concerning his approval of the recommendations not only of the pentagon but his entire national security team to deploy a more comprehensive missile defense system in europe. this decision came after a lengthy and in depth review of our assessment of the threats posed. the technology that we have today and what might be available in the future to confront it. we believe this is a decision that will leave america stronger and more cable of defending our troops, our interests, and our allies. let me be clear about what this new system will do relative to the previous program. with the president's decision, we will deploy missile defense sooner than the previous
program. we will be able to swiftly counter the threat posed by iran's short and medium-range ballistic missiles. we will deploy a missile defense that is more comprehensive than the previous program with more interceptors in more places and with a better capacity to protect all of our friends and allies in the region. we will deploy technology proven so that we do not waste time or taxpayer money, and we will preserve the flexibility to adjust our approach to the threat as it evolves. make no mistake, if you support missile defense, which i did as a senator for eight years, then this is a stronger and smarter approach than the previous program. it does what missile defense is actually supposed to do. it defends america and our
allies. i know we have heard criticism of this plan but much of that criticism is not yet connected to the facts. we are not "shelving missile defense." we are deploying missile defense sooner than the bush administration planned to do so. we are deploying a more comprehensive system. we are not reducing our capacity to protect our interests and our allies from iran. in contrast, we are increasing that capacity and focusing it on our best understanding of the iran's current capabilities. we would never walk away from our allies. we have read committed ourselves to our article 5 obligations under nato. we have sent that message in multilateral settings, from
presidents, from my trips to every other encounter and venue we have been in over the last many months. we are deploying a system that enhances the security of our nato allies. it actually advances our cooperation with nato and actually places more resources and more countries. two of our allies, poland and the czech republic, were very willing to host parts of the previous planned system, and we deeply appreciate that. we will continue to operate closely with both nations. through rotation of a patriot battery in poland, and closed research and development with czech cos. we have made it clear that those two countries will be at the top of the list.
let me underscore that we are bound together by our common commitment as nato allies and also by a deep, historical, economic and cultural ties that will never be broken. finally, let me reiterate what the president said yesterday. this decision was not about russia. it was about iran and the threat that its ballistic missile program poses. because of this position, we believe we will be in a far stronger position to deal with that threat and to do so with technology that works at a higher degree of confidence, that what we pledge to do we can actually deliver. my main reason for being here today is to give you a brief review of our agenda next week in new york. before i get into specifics, i
saw a cartoon from "the new yorker." a delegate was passing a note next to him. it is a birthday card, signed it and pass it on. comic relief is necessary in our work. as with most humor, this cartoon is also a commentary. it represents one view of the united nations, a caricature of what multilateral organizations spend their time doing. as president obama leads our u.s. delegation at this year's general assembly, i hope we can demonstrate that the united nations does not have to be just a diplomatic talk shop on first avenue. at its best, it can be an institution that brings the world's nations together to solve global problems through adherence to rules and
principles set forth in the un charter. it is the responsibility of the 192 member nations during the general assembly and beyond to capitalize on the opportunity for global cooperation and progress that the united nations of force to each of us. i outlined earlier this summer the obama administration's efforts to advance our interests and solve today's problems through a global architecture of cooperation we must begin by taking responsibility ourselves, something that under president obama, we have already begun to do on issues from climate change to non-proliferation. we have called on others to do the same. by strengthening partnerships, institutions and international regime, which can form a global consensus and use that leverage to offer clear incentives to all
nations to cooperate and live up to their responsibilities. we can also devise a strong disincentive for those who would act in isolation or provoke conflict. the united nations in this assembly to offer us a forum for nations to work together, to live up to that founding charter, and to abide by and in force international rules . i have a picture of eleanor roosevelt. she is sitting at a desk, working on the universal declaration of human rights. i have said this before. channeling eleanor roosevelt is not a bad idea. it reminds us of what is at stake as we move forward with
our responsibilities as it does the recent book, "the great experiment." we have to have effective global institutions. that is not a choice. it is an imperative. it is up to us to determine how to make them effective. the united nations is a building. it is not able to act in the absence of the decisions made by those member nations. in my view, we ignore it and walk away from it at our peril especially in the 21st century where interconnectedness gives voice and prominence to views that could have easily been ignored or marginalized in the past. few issues reflect the need for a global architecture of cooperation more than nuclear proliferation.
it will be a main topic of discussion next week and beyond. the president outlined a robust and ambitious arms control and non-proliferation agenda earlier this year. we believe that it sets the templates for what we should aspire to, moving toward a world of zero nuclear weapons. we understand that that will not be easy. we understand that it is a generational commitment. it might not happen in our lifetimes. as long as nuclear weapons exist in the world, the united states will maintain a deterrent capability. we want to be both on record in to use our best efforts to move toward more affective non- proliferation and more effective cooperation, toward hopefully arriving sunday at that future
goal. next week, the president will chair a meeting of the u.n. security council on non- proliferation. he will emphasize the importance of strengthening the international nuclear regime and the critical role that the security council must play in enforcing compliance with non- proliferation obligations. the president has asked me to lead the delegation to a conference on the comprehensive test ban treaty. this will be the first time a secretary of state has it will give me the opportunity to underscore the importance of the global non-proliferation effort and to broaden u.s. security interests. strengthening the non- proliferation regime means working to bring other nations in compliance. this includes north korea and iran. let me take a moment to say a few words about i ran which will be another key topic on the president's and my agenda next
week. it is important to recall what is at stake. iran has refused, for years, to address the international community's deep concerns about its nuclear program. those concerns have been underscored repeatedly by the international atomic agency and the u.n. security council. i ran's continued failure to live up to its obligations carries profound consequences for the security of the united states and our allies, for progress on global non- proliferation, and on progress towards disarmament period ahea. our concern is not iran's right
to develop peaceful nuclear energy but its responsibility to demonstrate that its program is intended use of the for peaceful purposes. this is not hard to do. i ran's continued refusal to cooperate has damaged the credibility of its claim that it does not seek a nuclear weapon. so iran face is a choice. the international community has made abundantly clear what is possible for all i iranians if iran lives up to its responsibility on the nuclear issue. the benefits of connections to the rest of the world, cooperation on peaceful nuclear energy, in partnership in education and science. there will be accompanying costs for iran's continued defiance --
more isolation and pressure, less possibility of progress for the people of the country. the obama administration has clearly conveyed our readiness to engage directly with iran. we know that dialogue alone does not guarantee any outcome, let alone success. but we also know that our past refusal to engage yielded no progress on the nuclear issue. nor did it stem iran's support for terrorist groups. over the past eight months, the president has reached out both to the iranian government and people. we have made clear our desire to resolve issues with iran diplomatically. iran must now decide whether to join us in this effort. since june, we have seen the
iranian government engaged in a campaign of politically- motivated and arrests, show trials, and suppression of free speech. the iranian government seeks a sense of justice in the world but stands in the way of the justice it seeks. nonetheless, we remain ready to engage with iran. not as an end in itself but as a means of addressing the growing concerns that we and our international partners have about their actions, especially on the nuclear issue. in new york next week, i will be meeting with my counterparts from the united kingdom, france, russia, china, and germany to discuss the way forward and to prepare for talks that are being arranged at the beginning of october. our message will be clear.
we are serious and we will soon see if the iranians are serious. in new york, we will work with our partners to put iran's toys into focus and to stress that engagement must produce real results and that we have no appetite for talks without action. let me highlight a few other issues that the president and i will be addressing at the general assembly and in the months ahead. iraq, afghanistan, pakistan, development and women. iraq has made important -- has made important strides in the international community to build a more secure and hopeful future for its people. we look forward to the parliamentary election next january as an important milestone in this journey. we pledge to work with the iraqis and the international community, including the invaluable u.n. mission to iraq to make these selections a
success. as a result of our common efforts, our relationship with iraq can enter into a period of transition as our military drawdown in the role of civilian agencies increases to better meet the needs of the future and to ensure a stable sovereign and independent iraq that contributes to peace and security in the middle east. this reflects no lessening of our commitment. it demonstrates that we have entered a new, sustained, and more mature partnership that will serve both of our country's far into the future. i am pleased that vice-president joe biden accompanied by jim steinberg recently returned to iraq to continue our robust engagement with iraq's leaders. that partnership will of course continue to build security cooperation was strengthening diplomatic formations but also it will help to build stronger
ties and commerce, the rule of law, good governance, education, science, culture, health care through our strategic framework agreement. i chaired a committee along with prime minister. we had our first full meeting in july and we will continue to be engaged in working on this broader agenda. also on the docket for the general assembly will be meetings related to afghanistan and pakistan. president obama has stated our core goal, to disrupt, dismantle, and defeat al-qaeda and its extremist allies and to prevent their return to either country. this is the goal we share with afghanistan, pakistan, and with the international community. pursuing al-qaeda and the taliban was the basis of the original u.n. resolutions that authorized u.s. military action after the september 11 attacks and created the international
security assistance force of 42 nations helping afghans secure their own country. our long-term security is connected to the security and well-being of the people of these two countries. to effectively squeezed the extremists fighting to destabilize both countries, the afghan and pakistan governments must be better able to secure their territory from these extremists and meet the basic needs of their populations. the recent afghan elections illustrate the promise and the challenges of afghanistan. alongside our partners in the united nations, we will continue to encourage all parties to respect the international and afghan electoral institutions charged with determining the final outcome of the election process. when the next president is inaugurated, we will work to step up the level of international engagement and
expectation with that new government in a strong partnership to strengthen governments at all levels. as we address these urgent challenges, we will work on other issues that have implications for american security and interests. following up on my trip to africa last month, the president will host a lunch for leaders for sub-saharan africa for the general assembly. i will meet with the coastal region president to continue our joint efforts to resolve the crisis in honduras. i will also be meeting with donors and other stakeholders committed to helping haiti responded to the dislocation caused by the global economic crisis for hurricanes and a history of challenges. i will continue discussions with our allies and other partners in asia about the situation in
burma. if the global architecture of cooperation the man's responsibility of us and our partners, also offers opportunities. just as we are focusing on urgent challenges like iran, iraq, afghanistan, and pakistan, so too are we pursuing a agenda devoted to expanding opportunities so more people can fulfill their dreams and live up to their god-given potential. i will focus attention on two areas of opportunity -- a development and women. they go hand in hand but we are talking about each of them because each in of itself is critically important to the point that human security, national security, international security ultimately rests on development and the role and rights of women. many of you have heard me describe our plans to integrate diplomacy and development as to of the three pillars and our
foreign policy. i have talked in different venues about the obama administration's commitment to lead with diplomacy. next week, i will outline how we will approach development in tandem with our diplomacy to be affected and inefficient to enable the state department, usaid to pursue and execute 21st century foreign policy goals. the foundation for our approach will be principles that will move us away from top down assistance that too often fails to meet the needs of those that we are attempting to help. to solve the complex problems of poverty, hunger, health, climate change, we want to focus on those root causes and look for approaches that really change, each transformed the environment in which people are making these decisions and in which governments are held accountable to a higher degree of
performance and transparency. we will be looking for ways to not only explain our approach but to highlight issues. i will be participating in an event with secretary general hosted by the u.n. and the united states government on food security. we have launched a diplomacy in development review. unfortunately, that adds another acronym, led by deputy secretary of state jack lewin and cochaired by emily slaughter. the acting administrator. this is a broad examination of our structured policies and budget and will lead to better accountability. our delegation and i will work to advance international efforts to recognize women as key
drivers of economic progress and social stability as well as addressing impediments to women's empowerment and advancement, particularly of violence. i will chair a session of the security council and will speak on the adoption of their resolution on women, peace, insecurity which will endorsed measures to implement security council resolution 1820 and address of violence as a tactic of war. i saw the scale of misery caused by this violence on my recent trip to the democratic republic of congo. having met with women who are the victims of the worst that humanity offers but also with women who are the strongest exemplars of the best of what humanity offers, i saw that very vividly on this most recent trip. next week, i will be speaking with other foreign ministers
about strategies to end this kind and to ensure that those who commit atrocities are prosecuted. i will work with women leaders, heads of state, foreign ministers at the general assembly to highlight the importance of raising the status of girls and women and investing in their potential. if women are free from violence, they can contribute to local economies and the change agents for greater prosperity. our agenda is ambitious. it is from northeast asia to sub-saharan africa outcome of europe, and the americas. we will remain vigilant about all of them. at this time of year as we contemplate unga next week, it seems only fitting that it occurs at the time when we are celebrating the end of ramadan and the beginning of the jewish high holy days. we will also be focusing on the
dream of a comprehensive peace between israel and the palestinians, resulting in an assurance of the security of israel and a state for the palestinian people. this is a time of reflection and renewal for hundreds of millions of our fellow citizens. it is a time when we can take stock and reassess and hopefully we commit ourselves to the values and ideals that move us forward. it is in that spirit that i am approaching not only next week's general assembly but the time ahead. i very much appreciate the excellent work and contributions of many of you in this audience in the capacities in which you serve and wrestle with these difficult problems that confront us. i hope that we will not only continue to have a partnership
that enables us to speak of our hopes and aspirations brought together produce solutions to the problems that we confront. thank you all very much. [applause] >> thank you so much. we have a little over 15 minutes. why don't we go immediately to the first question >> there he is. >> thank you very much. welcome to brookings and thank you for your strong and wise leadership.
you seem to make clear to the iranians that they have a choice to make. i wonder, president of ahmadinejad said the holocaust was a lie. he has also made very clear that their nuclear program is not something for discussion, that he wants to talk about dividing up the world and recognition from superpower status. how do you of fact -- what is the strategy for getting him to understand that he has to address the nuclear program and has to reassure the international community of their peaceful intentions?
the iranians had issues the one to discuss. that is the issue we want to discuss. i'm not going to prejudge this. medically lennar on a dual track. there is the process of engagement that we said we would pursue. the other are the consequences. i'm not going to speculate on what comes from this effort.
we have underscored, as i did again today, we're not in this just for the sake of talking. that is not our intention to talk forever. the president said we would take stock of where we are with respect to iran and the international community response about the time of the g-20, we would want to see some movement. i am well aware of all of the problems that you have just briefly alluded to, but we're going to move forward, see what if any changes in approach, attitude, actions that the iranians are willing to entertain and continue to work with our allies, many of whom are represented in this room. >> i'm calling on you as a
virtual member of the brookings academy. >> if i may follow up, ambassador. what are their we did what are the consequences? are there deadlines? we have seen this kind of the -- diplomacy before, with all due respect, they tried to negotiate with iran and there were objections by russia and others that meant that the threat of sanctions really never could be carried out as aggressively as the united states wanted. i know you have said that the missile defense decision was not about russia, but is there any indication that they may take another view towards iran? are there other threats out there? >> it is fair to say that there has been a much more concerted
out reach to both the iranian leadership and the people under president obama than we have seen in 30 years. it is not that of the presence did not look for ways to engage iran, but for a variety of reasons it was never carried through in a long term, a consistent manner. we, as you know, did not participate fully as a member of the p5 plus one until very recently. we outsource our policy and concerns about the nuclear program to others to try to intervene with and persuade iran to change course. we were on the sidelines. we were pacing up and down the sidelines extremely agitated. you're trying to figure out how to get other people to get on
the field to do with this problem and look where we are today. we are really no where. the potential for the nuclear program other than peaceful uses is obviously of great concern to us and increasingly to the international community. i do not want to prejudge this. i think we have been very clear about what we're looking for, the two tracks that we are proceeding down simultaneously, and we have begun conversations with the number of international partners and with all of the p5 plus one. to be the strongest possible sanctions against north korea that have ever been implemented against a member of the united nation with full cooperation?
not just on paper, but active enforcement of those sanctions? i have many of you would not have thought it possible. why did it happen? we have spent an enormous amount of time listening and working with our partners who are partners on some issues but maybe not all issues, but looking for ways to broaden that sense of cooperation and looking to understand how our views can be more effectively communicated a set of walking and on the sidelines being agitated. we're looking to find common ground in our assessment of the threats that we all face. i think that we have proceeded in a very thoughtful way, no guarantee of any particular outcome, but we're determined to preserve your. -- to persevere.
>> madam secretary, you have always, to my mind, very angrily focused on issues of domestic government. there has been attention to the question of corruption in afghanistan and the social and political consequences of that. what you think we can do concretely to make a difference? >> it can, this is something i want advice from those of you here at brookings -- ken, this is something i want advice on. corruption is as big a national security threat as i can imagine. we have never opposed it quite that way before, but it is how i see it. it is not only corruption in afghanistan. it is corruption, almost as an epidemic undermining governments, undermining the capacity of countries to make
progress in ways that would grow and middle-class, that would create stability and prosperity. corruption that siphons off natural resources that should be extracted for the benefit of all the people instead of a very small elite. corruption that has eaten away at the fabric of some of the country's. i saw this throughout africa where it is tragic. at my town hall in nairobi, god must have loved africa because africa was blessed with some many riches, but then one has to ask why are we support? you go to countries -- why are read so poor. good countries better so rich in diamonds, gold, and so much else and the corruption is endemic and securities concern.
my view is that the international community has to be much more focused. it is no longer about the united states passing a law saying we cannot go bribing people, but other companies and countries say that's how we do business. we are looking at a tipping point the comes to the impact of corruption in these countries. specifically about afghanistan, we have to take some of the responsibility, not for the fact that corruption was there predating us, but that we aided and abetted it in implicit ways by not demanding more. i am very conscience of the difficulties the corruption poses, but it is one of my highest priorities. i no longer see it as a good
government concerned. would it be nice if we could stop people from stealing from their own people? from extorting from national companies? yes, it would be very nice. is it absolutely essential that we figure out more effective ways to do that? you can look at energy and just now what the possible repercussions of the rampant corruption in the niger delta about human misery, lower production, disruption of supplies. that is an issue that comes really close to home. there are so many examples of that. i am looking for ways that we can take the very good initiatives that have been already undertaken and bring them to scale and expect more. in order to do this, we have to get a critical mass of major economies to be willing to work with us. they need to see this as, if not
an immediate threat and medium or long term threat. that is what we're trying to do. >> madam secretary, thank you for the opportunity that you give us. i was looking forward to hearing from you more about the middle east peace efforts. your husband, president clinton, has created lots of hopes in the past of bringing peace to the area. now president obama has also brought the almost same kind of hope after his speech in cairo. now what we are seeing is that the whole problem of the peace and war in the middle east is shrinking down the issue of
settlements and freezing of settlements where it is a much bigger issue. we see that israel is digging tunnels under the second holy shrine of islam. these are getting very high. i do not know what you are discussing with arab officials, but one of your allies in the area was warned that this will lead to a result that no one would want to see. i would like to hear from you that what seems to be senator mitchell's efforts to not make any process with netanyahu.
how are you going to deal with this issue in order to keep the credibility, the hopes that united states have produced in the area after the speeches of president obama? >> i understand the emotion and understand the great hope that is at the heart of your question. i want to make several points to you. first, this president started on the very first day with a commitment to pursue a comprehensive peace agreement premised on the two state solution. i can guarantee you that president obama and i are very patient and very determined. we know that this is not an easy road for anyone to travel.
i have personal experience about how difficult this road is. i well remember that brilliance, sunny afternoon on the south lawn of the white house when arafat shook hands. i well remember the disappointment at camp david, despite enormous efforts to try and finally forged that peace agreements when it was not successful. however, i believe that the commitment evidenced by my husband and the commitment evidenced by president obama to be in this from the very beginning, never to be deterred, never to give up, and expecting a both sides, not just one side, but both sides to be ready to pursue that comprehensive peace agreements. this is the best way for
america to demonstrate our absolute belief that this is you is that the core of so many other challenges that we face and therefore we are going to do all we can to persuade, cajole, encourage the parties themselves to make that agreement. the united states cannot make the agreement. the arab nations cannot make it. it is up to the palestinians and the israelis agreed to that end, we expect both sides, and not just one side but both sides, to be actively engaged and willing to work towards that resolution. i think what george mitchell has done has been very valuable in sorting through a lot of the concerns because, if you recall,
in the previous efforts of the bush administration through the road map, the parties were encouraged to work themselves towards a resolution. at the united states was night -- was not actively engaged as you were in the 1990's. do i think maybe we have lost some ground or maybe it is more difficult because of that? i do. that is not going to discourage us so let me reassure you. we're going to continue to do all we can working with everyone involved, most particularly the palestinians and israelis come to reach that comprehensive peace agreements that we think is in the most in -- in the best interest of both countries. >> i would like to ask you about an issue that you know about from personal experience and that is health care. i only put a question to you as
the secretary of state because many are concerned that it actually has implications for the foreign policy of the united states. >> nice try. [laughter] >> a bit of a stretch? >> i am sure you agree to talk about our global health initiative. >> actually, no. [laughter] let's talk our national health initiative in the following context. a lot of well wishers of yours and president obama's, both in this country and around the world, are concerned that if the health-care debate is battling and ends in a defeat for the president that it will have serious implications for his ability to get a cap and trade bill that he can take to copenhagen or at least progress on global warming treaty you mentioned you were going to be playing a role with the regarding the future
comprehensive treaties credit health care goes down, it will be bad for ratifications next year. we would be very interested in your views of the merits and also the connection between the president's domestic agenda and his foreign-policy agenda which is your charge to carry out. >> based on my own acquaintance with this issue and my previous experience in the white house, i do not expect the promise of the question. i think everyone here probably recalls that we were not successful in 1993-1994. i do not think in any way undercut president clinton's ability to deal with the rest of the world, make tough decisions in places like bosnia, kosovar, and lots of other challenges.
-- bosnia, kosovo. i do not accept that. i do not think we're going to face it because they think we're going to be successful. the work that is being done and the expectations that people have 15 years from are unsuccessful effort back in 1994 means that more people know what is at stake, where people have seen us try other things. i remember when the arguments made 15 years ago was to let the hmos hand lent -- handle it and it will eventually cover everyone. that was not to be. there is a real world experience that people from all walks of life have that in the absence of what is being proposed, costs will continue to go up for those
of us who are insured. coverage will continue to shrink. the numbers of people have access to any form of insurance will continue to diminish. therefore, i think we will be successful. will it be everything everyone person will want? no, of course not. that is not the nature of the compromise required. i am quite optimistic. we really have an opportunity now to produce an outcome that will significantly improve the important aspects of health care reform, controlling costs, increasing quality, expanding coverage. it is interesting what we're proposing is fundamentally so conservative compared with so many of our friends and allies
around the world who do a much better job than we do in covering everybody and keeping costs down. and yet, some of the political opposition is so overheated. we need to calm down, take two aspirin, go to bed, think about it in the morning. i am very optimistic. it will not be pretty. it is like sausage making. we will end up for a bill for the president to sign that will be in advance. that is what i think is in the best interest of the country, and of course it will have a present -- political benefits. what is most important is getting this done for the future budgetary demands of our government, for the future well- being and health of our people, and that is what is going to happen. >> thank you for that. let me ask everyone to remain seated. we will think the secretary in just a second, but i want to
explain protocol. i asked everyone to remain in this room, seeded, while i escort her out. i wish to as gold brookings scholars to stay here. if you follow her out, i am going to get nervous. [laughter] please join me in this -- in thinking hillary clinton for a great hour. [applause] [no audio] [unintelligible]
>> saturday on a mayor"and the courts," she spoke about how she prepares for arguing cases before the supreme court and her thoughts on whether or not cameras should be allowed in the courtroom. that airs tomorrow and 7:00 p.m. eastern on c-span. this weekend, best selling author of "into the wild" on his latest which is a biography of the football player turned u.s. army ranger who was killed by friendly fire in afghanistan. this is part of c-span 2 booktv weekend. >> the first lady added her voice to the health-care debate today. she was joined by the health secretary read this event also includes three women talking about their health care experiences.
>> good morning everyone. i am delighted to have a chance to be here with the first lady. we got to spend a lot of time on the campaign trail together. we talked to women like our women here today about the stories of their life struggle to try and figure out affordable health care. i do not get to see you as much now. i have a few -- she has a few things going on. this passion about having affordable, available health care for americans is one that i know the first lady has not lost. this is an exciting time, as tina said.
we're closer to reform than ever before in the history of this country. it is one of the reason that the battle lines are getting tougher. its factory -- a victory was not so close. the heat is on because congress continues to move forward. the president continues to be focused on this. the legislative process is actually under way. there is a message that is coming for louder and clearer from americans every day. the only option that guarantees cost and more americans losing coverage, the only option that does nothing to improve the quality of care, the only option that is truly unacceptable, it is the status quo. that is clear to people across this country. [applause]
former president ronald reagan used to say that the status quo is just a latin for the "the mess we are in." he was absolutely right. the me tell you what the status quo looks like, particularly for women. insurance companies can continue to charge women 50%, 75%, sometimes 100% more for exactly the same premiums. insurance companies in states across this country can deny coverage to women who have had a c section or victims of domestic violence because those are pre- existing conditions. if you develop breast cancer, insurance companies can take away your coverage. this is just because you forgot to declare a case of acne. that is a real story that happened to a woman here in the united states just within the past couple of years.
a system that treats women like that is unconscionable. lots of people across america are saying they are tired of waiting and that we need a change right now. this should never happen again in the united states of america. the president has proposed some strong and reasonable plans to fix what is wrong with our health insurance system. you will hear more about his proposals from the first lady. the roulette -- the reality is that we need your help. being here today is an important step, but what is more important is to reach out to your friends and neighbors. reach out to your pto list, your contacts, your kids in states around the country, of queens is the you have and tell them we are on the verge of making history in this country. we are on the verge of turning an important page.
44 years ago we were here with medicare. think about a country where seniors went into their later years without any assurance that they would have their bills paid for or get the treatment they needed. it is unimaginable that we would go back to those days, but that is what the situation is like for millions and millions of americans. we have the opportunity to take the next big step forward to make sure that all americans have affordable, available health care. with your help and your support and your voices, this will happen. we can do this. we can pass health insurance reform this year. i want to thank you for the hard-working have done, but roll up your sleeves. we are close to the finish line, but the house and senate need to continue to move ahead. we need to get a bill to president obama's desk this fall that he can sign and make the change that all americans are waiting for. thank you very much.
[applause] >> thank you. i would like to bring up three brave women whom i want to personally think for coming here today in really taking the step to come forward to share their stories with you. they're going to come up one at a time. our first woman is from cincinnati, ohio, someone from washington, d.c., and then someone from kansas city, missouri. [applause] >> good morning. before i get started, this is going to be the only light hearted part of my part -- white hearted story. today is football friday. in a lot of parts of the united states, i would like to apologize to my 15-year-old son
who is a member of the elder high-school marching band. lowbrows roles. -- low brass rules. sorry, guys. it is a rite of friday passage. [applause] guys, it is friday night. go, printers -- panthers, go. my name is a debi i am from cincinnati, ohio. i had 25 years working in the health-care industry working for insurance companies and large hospital care organizations. i never in my life thought that my life would turn into sleepless nights worrying over
paying health-care bills and paying my health care premiums. i worked in the health-care industry. five years ago i lost my best friend and roger to: cancer. on halloween 2000 he got his diagnosis and prognosis that he was given four-six weeks to live. i was a working mother at the time with the first grader. i refused to give in and believed what i was told by a cat scan and an oncologist and managed to convince young colleges to was wrong. i was given 3.5 additional years with my husband. we thought we had good insurance. that is until every person in this room goes home and read your benefit book and read how your catastrophic benefits reach for chemotherapy. when mike -- when my husband died, i was up with over
$100,000 for the years of chemotherapy procedures and hospitalizations. i was able to use my knowledge of the health-care industry to negotiate down this bills and i was able to pay those bills with a lot -- with what little life insurance he left me. i was able to pay because he left me some life insurance money. he was of the age when people told him to not be insurance poor. and speaking out today and i risk having his charts polled from the hospitals for another audit to look for unbilled charges and again being rebuilt. the harassing phone calls and the nightmare to live all over again. my story does not end there. while working for a large hospital system, i fell on vacation and broke my right wrist. before and after, i was placed
on light duty. the benefit was for 12 months. my hand surgeon wanted me to have three more additional months of rehabilitation. i was not granted those three months. i was terminated. i began to pay my insurance the of cobra. they have written into that your employer can add on an additional premium which in my case was up to 13%. for 18 months i paid this additional premiums. during the time that i had off while i was unemployed, i enjoyed spending time with my son who was still grieving for his father, but i enjoyed spending time with my mother and my aging mother-in-law that was taking care of at the time. as cobra was beginning to expire, i find myself having to find a new health insurance policy. i was denied by three carriers
on in the we picked up by one of the larger carias because -- larger carriers but at a higher premium. i was working 12 hour days, a full-time mother to a grieving son, and working unbelievable hours trying to keep the house, i had to go on antidepressant for one year. just one year. because of that, i was considered high risk. this was due to underwriting guidelines. i watched my late mother mom struggle with medicare in the late years of her life. -- mother in law. i worked with elderly families and family members that i see concern as well. the real reason i am here is every month i struggled to paint close to $1,000 per month for myself and my son.
i am afraid and scared to go without health care coverage. next may, i lose my social security spouse benefit because my son turns 16. i had been using that to pay for our health care premiums because my son turns 16 and 9 loews the benefit -- and i lose the benefit. i have now become a victim of this industry. this is where my career, life, and i have given my heart to it. if i am unable to find employment, i do not have an answer for myself. my son will not -- my son will have coverage due to the late senator kennedy chip bill. i cannot continue paying the premiums. as a widow, you learn to do anything and everything very quickly. this is one thing i cannot fix by myself. i need help and i need help now. thank you very much. [applause]
>> good morning, everyone. i am here to tell my story. back in july of, my partner and i were getting ready to go direct concert. i discovered a lump on my right nipple. my partner assured me that everything would be ok. she said she was going to pull -- put a call in to see if you get a referral to get a mammogram. i went to get the mammogram and the sonogram at the same time and they told me it was a cyst that needed to be removed. unfortunately i did not have insurance at this time, so i had to wait for open enrollment season at my job to get the insurance. i am really scared because i do not know if it will grow bigger and that means more rigid more of my rest will have to be removed. i need help and i am hoping that
someone out there will help me. thank you. [applause] >> hello. i am a long cancer and a double breast cancer survivor. -- i may lung cancer. have now had to file for bankruptcy agreed during chemo and radiation this total over $27,000. it took my savings and what i had. the rest ended up in bankruptcy courts. the company i work for has changed to a different insurance company did to the high cost of the premiums from them. in doing that, we got less coverage and they looked at me and told me that the insurance policies are comparable. with the new copays that i have to pay, they are higher, and i
have to pay 10% of all of the costs of all of my bills. my copays would have been $101,000 instead of the $27,000. i have a hard time seeing these two numbers be incomparable in anyone's imagination. i believe i am alive today because of early detection. this is now a situation that i have to forgo. i cannot afford the routine screenings. there are too expensive. i either have to make a choice to keep a roof over my head or have routine screenings. at this point i choose to keep your roof over my head. i think there is a huge populace of people like myself that i have tried to get other insurance but i am not able. the breast cancer, if i was 10 years out on that they would
cover me, but they will never cover the long cancer. -- lung cancer. i am unemployable because of my pre-existing conditions. the only way i can get insurance is through an employer and i am at their mercy. i want people to realize there is a large population here in the united states that are uninsurable, unemployable, and we have to accept whatever the offer as. thank you and i appreciate your time. [applause] >> thank you for your powerful stories and for having the courage to come here and tell them to all of us. i hope this is the spark to move
us all on to push this through to the and in these coming weeks. these are the women and there are thousands and thousands of women who like debi, roxi, and easter. to close our program, i would like to bring back the secretary of to introduce our first lady to finish today. [applause] >> i also want to thank are three contributors today because their voices are the voices of women across this country. different situation, different location, but very similar stories and there are stories that the first lady listened to and talked about for two years on the campaign trail, reaching out to women from coast to coast, informed her passion
about this issue. i watched her in cities across the country be able to draw upon not only the life history of a lot of individuals but their plight. that is part of the passion that propels this initiative for both the first lady and the president. michelle obama has been remarkable in her first eight months as first lady of the united states. she has been a role model, wife, mother, of but the most famous and vegetable gardener in america. she is a great spokesperson for healthy living, healthy life styles, and olympic champion, the president's closest adviser, and an incredible role model for
women and girls across america and across the world. i am pleased to call her my friend. the first lady of the united states, michelle obama. [applause] >> thank you all. please, sit. first of all, good morning. i am so thrilled to see so many of you here this morning at the white house. welcome. that is including my good friend, dr. dorothy. [applause] she is always there. for the past eight months and before, if there was a big event, an important event, she
finds a way to be here. she is my inspiration. it is wonderful to see you again today. thank you so much. [applause] thank you all for joining us today for the outstanding work you are doing every day on behalf of women and families across this country. i have to think archer ordinary secretary of health and human services -- i have to think -- thank our extraordinary. this includes pushing for health insurance reform and preparing us for h121. pursuing cutting edge research to find treatments and cures for tomorrow. clearly this is not the easiest portfolio she could have. she is doing a terrific job and we're grateful for her leadership.
i also want to think tina chen who you all know. [applause] she, too, is doing a fabulous job for our office of public engagements. she pulled together today's events. she is also a key figure had making sure we are all aware of what is going on. finally, i want to thank the three women behind me. [applause] is not easy to come here and tell your stories. the stories are not new. at the stories are happening all over this country. -- these stories are happening all over the country for millions of women. for two years on the campaign
trail, this is what i heard from women, that they were being crushed by the current structure of our health care. crushed. these stories that we hear today, and all of us if we're not experiencing it we know someone who is, these are the stories that remind us about what is at stake in this debate. this is really all that matters. this is why we're fighting so hard for health insurance reform. at this is it. this is the face of the fight. this is why i would like to talk to you today. that is why i am here. that is why reform is so critical in this country, not tomorrow, not in a few years, but right now. people are hurting in this
country right now. there's also a reason why i invited this particular group to talk today. there is a reason why we have invited the leaders not only from family advocacy groups and health care advocacy groups but from so many organizations that have been fighting for decades path for empowerment for women. when it comes to health care, as the secretary said and we all know, women play a unique and significantly increasing role in our families. we know the pain because we are usually the ones dealing with that. eighth in 10 women, mothers, report their the ones responsible for choosing their children's doctor, getting them to their cat -- there catchups created many women find
themselves doing the same thing for their spouses. [laughter] more than 10% of women in this country are currently caring for a sick or elderly relatives, often a parent. it could be a grandparent or a relative of some sort, but it is often a parent. the are making critical health- care decisions for those family members as well. in other words, being part of the sandwich generation is what we're now finding, raising kids while caring for a sick or elderly parent, that is not just a work-family balance issue anymore. it is not just an economic issue any more. more and more is a health care issue. it is something that i have fought a great deal about as a mother. i will never forget the time
eight years ago when sasha four months old and would not stop crying. she was not a crier so we knew something was wrong. we were able to take her to our pediatrician the next morning. he examined her and said something is wrong. we did not know what, but he told us that she could have meningitis. we were terrified. he said get to the emergency room right away. fortunately for us, things worked out. she is now the sasha that we all know and love today who is causing me great excitement. [laughter] it is that moment in our lives, it flashes through my head every time we engage in the health insurance can't bridge a conversation.
-- health insurance conversation. what would be done if we had not had health insurance? what would happen to that beautiful little girl if we had not been able to get to a pediatrician who was able to get us to an emergency room? the consequences, i cannot even imagine. she could have lost her hearing, her life if we have had to wait because of insurance. it was also fortunate that we had good insurance, right? if we had not had a good insurance like many of the panelists up here, we have -- we would have been saddled with costs for covering the emergency room visit, her two days in the hospital. we would have still been paying off those bills. this issue is not something that i thought about as a mother. i think about it as a daughter. as many of you know, my daughter had -- my father had multiple sclerosis. he contracted it in his 20's.
as you well know, my father was a rock. he got up and went to work every day. i find myself thinking, what would we have done as a family on the south side of chicago as my family had not had insurance? if he had not been able to cover for his treatments? what would it have done to him to think that his illness could have put his entire family into bankruptcy? what if he had lost his job, which for in he never did? what if they would have changed in assurances, which fortunately never happened. we became one of the millions of american families who cannot get insurance because of a pre- existing conditions. and these are the thoughts that run through my mind as i watch this debate and hope that we get this right. let's be clear.
women are not just this proportionally affected because of the issue. women are affected because of the jobs that we do in this economy. we all know that women are more likely to work part time or to work in small companies or businesses who do not provide any insurance at all. women are affected because, as we heard, in many states insurance companies still can still discriminate because of gender. this is still shocking to me. these are the facts that still wake me up at night. women in this country have been denied coverage because of pre- existing conditions like having a c section or having had a baby. in some states, it is still illegal to deny a woman coverage because she has been the victim of domestic violence.
in a recent study, it showed that 25 more women are charged up to 45% more for insurance than 25-year-old man for the exact same coverage. as the age goes up, you get to 40 and the disparity increases to 48%. 40% difference for women for the exact same coverage in this country. it is not just women without insurance. as we have heard and as we know who are affected. plenty of women have insurance, but it does not cover basic women's health services like maternity care or preventive care like mammograms or pap smears which we all know we have to have. we cannot go without these basic services. many insurance policies do not even cover it. or policies cap the amount of coverage that you can receive or
drops coverage when people get sick and they really need the care. maybe people have coverage, but they're worried about losing it if they lose their jobs or change jobs for the company changes insurance carriers. out of pocket costs get higher and higher. it is hard to be able to plan your monthly bills when you do not know what your premiums are going to be. a lot of people find they have to drop insurance because they can no longer afford it. many women are being charged more for health care coverage, but as we all know women are earning less. women earned 78 cents on the $1 to a man. it is not exactly surprising when we hear statistics that more than 50% of women report putting off needed medical care simply because they cannot afford it. we have trouble putting ourselves first when we have the
resources. just making the appointment when you have insurance to get your regular screenings, to take care of those bonuses, those bonds, launched, pains that we tend to ignore -- those bumps, lumps, pains. it is not surprising that so many millions of women around this country are simply going without insurance at all. the thing that we all know is that the current state, this current situation is unacceptable. it is unacceptable. [applause] no one in this country should be treated that way. it is not fair. it is not right. these are hard-working people we're talking about, right? these are people who care about
their kids, their lives, and the circumstances could happen to any of us. this is one of those there but for the grace of god go i. none of us are exempt ever. i think it is clear that health insurance reform and what it means for our families is very much a women's issue. it is very much a women's issue. and of a woman to achieve true equality for women, if that is our goal, if you want to ensure women have opportunities they deserve, if that is our goal, if we want women to be able to care for their families and pursue things they could never imagine, then we have to reform the system. we have to reform the system. the status quo is unacceptable. it is holding women and families
back. we know it. fortunately, that is exactly what my husband's plan proposes to do. it is important for us to understand some of the basic if you do not have insurance now or you lose your insurance some point in the future, you can purchase affordable coverage through an insurance exchange. it will have a variety of options so you can compare prices and benefits. this is the approach that is used member of converse with insurance. the thought is that it is good enough for members of congress, it should be good enough for the people who vote of them in. [applause] boughthis is an important part e plan. if you already have insurance,
and there are people who worry that they will lose what they have under this plan, if you already have insurance you are set. nothing changes. you keep your insurance, you keep your doctor's, and you are blessed. this plan puts in place some basic rules of the road to protect you from the kinds of abuses and unfair practices that we have heard. under this plan, insurance companies will never again be allowed to deny people coverage for pre-existing conditions. it sounds like a good thing. with three had a breast cancer, diabetes, asthma, hypertension, or just had a c section, none of that will be a reason to refuse it you coverage under the plan that my husband is proposing.
when you are fighting an illness, he believes that you should not also have to be in the process of the fighting insurance companies. [applause] under this plan, insurance companies will be no longer to drop your coverage when you get too sick or refuse or set a cap on the amount of coverage you can get. it will limit how much they can charge you for out of pocket expenses. getting sick in this country and should not mean you go bankrupt. that is a basic principle of this plan. finally, this plan will require insurance companies to cover basic preventive care. it seems simple. [applause] for routine checkups to
mammograms to paps mayors -- pap smears, is to come to no extra charge. she can get the screenings she needs to save her life. we already know that if we catch diseases like cancer early, we know this, it is much less costly to treat and we might just be able to save some lives. we know this. under this plan, we can save lives and we can save money. it is not just good format -- for medicine, but economics as well. i think the visit -- this is a pretty reasonable plan. i do not know about you. [applause] i know many of you believe it is
health show -- insurance, stem cell research, to passing the family medical leave act, the folks in this room, you are the ones that made those phone calls, right? that you wrote those letters. you knocked on those doors. you're the ones that helped make that happen, and that is exactly what we need you to do today for help for sure -- for health insurance reform. we will need you over the next few weeks to mobilize like you have never mobilized for -- before. we need to educate your members about the plan is and what it is night, because education is the key to understanding, and it will take phone calls to explain, to talk things through, to make sure that people understand not just what is at stake, but what this all means. we know there will be all sorts
of myths and misconceptions about what the plan is and is not, so it is so important you make sure people know the facts and at least they make their decisions based on the truth of what this plan is and is not. we need to make your voice is heard right here in washington, and you all know how to do that. and, no, it will not be easy. because there are always folks who are afraid of change. we all understand that. we talked about this all during the campaign. change is hard. sometimes the status quo, even if it is not right, feels comfortable because it is what we know. so it is understandable that people are cautious about moving into a new place in this society. there will always be folks who will want things to stay just
the way they are, to set -- to settle for the world as it is. we talked about this so much. this is one of those times. look, i am here today, standing before you, as the first lady of the united states of america because you all did not settle for the world as it is, right? he refused to settle, and as a result of many of your efforts, as a young girl, i was able to dream in ways that i could never have ever imagines, that my mother could never imagine, that my grandmother could never have imagined. and thanks to so many of you, i am raising these beautiful young women, you know, who are going
to be able to think so differently about their place in the world because of the work that you have done. health care reform is part of that movement. health insurance reform is the next step. we're going to need you all, focused and clear, picking up the phones, right in your congressman, and congresswomen, making this something that is the highest party for all of us. -- highest priority for all of us, so we can make sure that every single family in this country can move forward as we hope that they can, that they do not have to worry about whether they can insure themselves, they do not have to worry about whether their kids are going to break an arm. that is what kids do, the great
his book "where men win glory." >> congressman ron paul wants to hold the federal reserve accountable for the economic crisis. he wants to end the fed. he talks about his new book on sunday. >> susan rice briefed reporters today on the president's scheduled during the you and general assembly meeting next week. topics include a resolution on nuclear proliferation.
>> good afternoon. to enlivened the week, described the week ahead, we have susan rice with us. she will walk you through that, and then we will do our regularly scheduled interview. >> good afternoon, everyone. in anticipation of the president's historic first visit to the united nations next week, i want to talk about the work we have been doing at the u.n. over the past eight months to advance our interests and make american safer. also, how the president intends to use his time next week. the united states has dramatically changed the tone, the substance, and the practice
of our diplomacy at divided nations. our approach to the u.n. as an institution. as well as our approach to multilateralism as well. we start from the premise that this change is necessary because we face an extraordinary array of global challenges, things like poorly guarded nuclear facilities, terrorism, a kid, nuclear challenges from iran and north korea, genocide and mass atrocities to, cyber attacks, pandemic disease, climate change, international criminal networks and organizations. these security challenges can only be dealt with in cooperation with other nations. they cannot be dealt with by any single country in isolation. in the 21st century america's security and wellbeing is in fact inextricably linked to this shirker the -- to the security
of peoples elsewhere. in both the security council and the general assembly, where working to forge common purpose with other nations. let me go over the principles that have guided our new approach to the u. n. first, we work at the u.n. to promote american's core national security interests. on north korea, which negotiated a unanimous security council resolution imposing the toughest sanctions on the books against any country in the world today. we continue our work in the council to ensure that iran meets its obligations and to do with pressing crises in places from condo to somalia. second, we participate constructively, rather than throw up our hands and walk
away. we try to roll up our sleeves and get things done. considered that it -- consider the united nations human rights council. we won a seat with 90% of the votes cast. we joined this trouble body aware of its many flaws. we recognize that we cannot fix it or contributes to fixing it by carping from the outside. third, we stand firmly on principle and resolute on issues that matter most to us, but we are not taking petty battles for the sake of being contrary. in the past we have sometimes let ourselves be defined by as much as what we stand against as what we stand for. we have changed course. we have embraced the united nation's millennium development goals. we have rescinded the mexico city policy that barred u.s. assistance to programs that support family planning and
reproductive health services. we have signed the first new human rights convention of the 21st session -- 21st century. we reversed course to back a statement at the general assembly opposing violence and discrimination against people on the basis of sexual orientation. when no longer block at mentions of reproductive health. we seek constructive working relationships with nations large and small. while we pursue more effective cooperation among members of the council, we are also mindful of the fact united nations consist of 192 member states, all of them voting in the general assembly, and more than half of the an's membership consists of small states with populations of less than 10 million people.
home we meet our obligations. as we help others to strengthen the united nations, the united states has to do its part as will, and we are. we are paying our bills. we have work with congress to pay our dues in full and on time, and thanks to the strong support of congress, we have been able to clear the u.s. hours to you and's regular budget and this to its peacekeeping budget. we will meet our 2009 obligations on the peacekeeping budget in full, and if the administration's budget request is fully funded, we will keep current on both our regular and peacekeeping accounts, allowing
us to start to move towards ending the practice begun in the 1980's, of paying our bills to the u.n. and other international organizations nearly a year late. finally, we push for serious reform. the u.n. needs but greater efficiency and greater effectiveness. each dollar must serve its intended purpose. it must be spent cleanly and wisely, be it for development or peacekeeping. we need operations to be planned expertly, deployed more quickly, budgeted, ably led, and and it responsibly. in january, when i went up for my senate confirmation hearings, i testified we would be pursuing for broad long-term priorities. a focus on peacekeeping, development, climate change, and non proliferation. the president's visits the united nations next week will highlight the ministers of's
focus on each of this four priority areas treat the to get you some of the major events on the agenda and what i hope will be a reflection of chronological order. on tuesday, the president will deliver remarks at the secretary general's summit meeting on climate change. this is a head of state level meeting to open to the entire u.n. membership, an opportunity for the president reaffirmed the u.s. commitment to addressing the challenge of climate change and discuss solutions with a diverse audience at the highest levels. he will also host on tuesday at a lunch for heads of state and government from sub-saharan africa. this will focus on how the united states can work in partnership with african governments to strengthen african economic and social development. the talk will focus on three topics -- job creation,
especially for young people, creating a more conducive climate for trade and investment, and ways to mobilize african agriculture to create jobs and help feed the continent. also on the 22nd, the president will have a bilateral meeting with chinese president hu jintao and attend a climate change dinner hosted by the secretary general. the 23rd, the president will meet with the japanese prime minister for the first time. he will then deliver his historic first speech to the united nations general assembly and address his view of international cooperation in the 21st century and the need to move beyond old divisions to focus on the future. he will lay out a new direction that he has set for american firm policy and talk about our mutual responsibility to make progress on several key priorities that will advance our common security and prosperity.
also on wednesday, he will host a meeting with countries that contributed the largest numbers of police and troops to the united nations peacekeeping operations. this is an opportunity for him to focus attention on reforming and strengthening the u.n. peacekeeping for the 21st century and to recognize the largely unheralded contributions of those that are providing the backbone of these critical peacekeeping operations. the same day the president will attend the secretary general's annual launched 4 heads of state and government. he will meet with president medvedev of russia in a bilateral meeting. that evening he will host with the first lady if additional u.s. reception for visiting heads of states and delegations. on thursday, the president will chair a summit level meeting of the united nations security council on nuclear non-
proliferation and nuclear disarmament. this summit will focus on these topics broadly, consistent with the things the president outlined in his speech in prague. this is only the first -- only the first ever summit level meeting of the security council and the first time an american president will ever have shared united nations security council. our goal is to underscore the global reach of proliferation threats, the broadly shared obligation to respond to these threats, and the positive steps that have been taken to reduce nuclear dangers, and the east central role of the council and address and growing and pressing nuclear threats. it is a very full agenda, one we look forward to as a means of underscoring but the value of the institutions of the united nations and the work that needs to be done by us and others to reform and strengthen it to make it as effective as it needs to be to address 21st century challenges, to live up to its
potential, and be what its founders envisioned it could be paired with that, i am happy to take your questions. >> these times -- are there times you have given? >> i am not prepared to give specific times. >> we have a schedule. >> are there other meetings going around out of state or out of your office in terms of the middle east peace process or in terms of lower-level out reach to other governments, including some in the middle east that you could tell us about? >> this week at the united nations general assembly is full of all kinds of meetings, bilateral, multilateral, small group, large group. some of these are chaired and hosted by the united states that we are participating in. i have outlined for you what we're doing at the presidential level.
the secretary of state has her own very full schedule. i will be joining in those meetings with the president and the secretary to a substantial extent and do some meetings of my own, as will other officials. it is a very busy time, and then other countries are hosting their own set of meetings. there is no shortage of activity and an opportunity to advance our agenda of all these fronts trick with respect to the middle east, i am not in a position to announce anything other than what i have some describe, but it is fair to say that when the state department is in a position to outline their schedule, you will seek meetings related to that region and others. >> what is the main theme of his address? >> the main thing is we face a present array of global challenges. we need the kind of cooperation and leadership from a wide range of countries to meet the challenges. we cannot afford to get bogged
down in the traditional north- south or other customary divisions that had hindered effective international corp. everybody has a responsibility. the u.s. is leading a new, and we are hoping others will join. >> could you tell me about meetings that have to do with cuba, iran, or syria? >> not aware of meetings related to cuba. with respect to iran, this is a topic that i think will come up in a number of different meanings. we have talked about taking stock of where we are with iran, with our partners during this trip of time. that will happen not only in the format of p 5 plus 1,. there will be discussions at the g-eight level.
are you doing this or am i? >> i am sorry. >> is the president expecting any concrete advances or agreements, anything that he can hold in his hand and say he has accomplished this >> yes. with respect to the united nation's security council summit, we are expecting agreement on a comprehensive security council resolution on nuclear non-proliferation and disarmament. >> that is the only thing we will see a resolution on? >> that is the only thing that we could get a resolution on. , will there be negotiations leading to something else down the road? are you hoping for any announcements, anything concrete? am i am not want to presage anything.
allow me to say these are going to be important bilateral meetings with important leaders and partners, and they will undoubtedly effected in advancing our agenda. >> you did not mention the clinton speech. is he still doing that? that is not off the schedule? >> no. >> you did not mention anything on monday. does he have any global event on monday? bmi know. but quickly, there have been a lot of talk that there could be a trilateral meeting next week, and is there any hope that there could be one, or is that off the table? >> i am not in a position to make any announcements on that. >> you hinted at this idea that
the u.n. needs reform itself, and that is going to be one of your goals? the president at the g-8 asked why are all these summits happening. it is likely that more could come out of the g-20 than the u.n.. what are the ways to measure of this reform effort you are putting forward, the easy ways for us to see that maybe you and is reforming its up, maybe it can be a useful international organization? >> that is a broad, but important question, and there are different ways in which we are working to encourage reform and renewal of the united nations to. there have been significant progress in that regard over the last four or five years. some of that has come in the form of greater management efficiency, transparency,
opportunities for cost savings. we pursue all that. in the wake of the world for food scandal, the u.n. went through a very substantial set of internal management reforms. a lot of our focus is on implementing those reforms and making sure what was promised was actually delivered. beyond that, which are looking in particular at streamlining and making more effective u.n. peacekeeping over the long term. this the most costly and important, arguably, instrument united nations employees to protect civilians and enhance peace and security internationally. it accounts for 70% of the u.n.'s overall expenditures. there are some 15,000 troops policing civilians, taking on far more complex challenges. we are working with the institution and other states to
make this deployments were swift, effective, and making sure we are getting off the mall bang for our buck. looking for opportunities to consolidate logistical support in places like africa. that will yield cost savings. efficiency, and also greater effectiveness. we are the largest contributor to the united nations. we're also acting very much as a responsible and constructive participant in the united nations context. when we talk about making it the institution more efficient, it is not from that vantage point of wanting to see it fail. it is from it wanting to see it succeed. >> is there a summit level meeting of the p5 plus 1?